The watchmaker is selling his watches for between $45k and $250k and producing one a year on average so yes, he'll need rich customers. I suspect that there may be a different market in Japan though - perhaps older and more traditional people.

Sooner or later he will need to take on an apprentice - it would be nice if he can start a school like that.

You mentioned electronics, and the Japanese tradition of craftsmen making the whole thing brought to mind the slightly eccentric electronics of Susumu Sakuma. He (was?) making retro audio amplifiers on his kitchen table at one point.

http://www10.big.or.jp/~dh/sakuma/index.html

That is not that much of an income taking into the skill going into these watches. Wonder if he has to deal with much repairs and returns?

Repairs yes, returns not so much.

Every independent watchmaker has to deal with repairs, but once you pass six figures or so for a single timepiece you don't see them outright returned much anymore (statistically speaking).

Even at high five figures you don't see them returned very often, but you do see a valley of returns at the low five figure mark ($10-$30k), or at least a lot of reselling. This is the ceiling at which a watch is "affordable" for people who aren't wealthy if they are well-paid, have few to no obligations and are fiscally irresponsible, which often results in buyer's remorse. This is one of the reasons why it's comparatively easy to find a mint or near-mint preowned watch at a significant discount less than two years out from original production year for a lot of "entry level" timepieces from the most high end brands (Lange, Vacheron, Patek, etc). You won't find similar discounts at the mid, high or ultra-high tiers within these brands, because they circulate less.

Moreover, buyers who are more likely to regret their purchase typically buy more recognizable brands. Buying from an independent takes a higher commitment to the art of haute horlogerie because virtually no one is going to recognize, even among people who recognize more than just Rolex. The market for reselling an independent-made timepiece is also lower (though in the case of someone like Smith or Dufour, this is probably not a concern).

Source: Watch hobbyist, I own an A. Lange & Söhne and Nomos Glashütte, frequent watch forums and read watch blogs.

That's how it goes for many things hand-made. My mother was a spinner and hand-weaver, barely getting by selling to some very, very wealthy people.

Another example is that I build 1:10 scale truck bodies for radio control cars. One takes anything from 2 to 12 months, depending on the amount of detail I'm willing to put into engines, opening doors/hood/trunk, backlit dashboard, and so on. I'm often asked to sell them, or to take commissions. I always refuse, as one (basic) body, counting time and materials, should go for at least $10k to be even marginally profitable.

I've given some away, which is a lot more rewarding than selling one for $500.

I agree that the income is (relatively) modest compared to the training time and skill level involved. I suspect that the income could grow organically in the future with apprentices &c.

I'd imagine a 'return' would be a trip to the chap's house and personal attention until the watch was working properly. My old hand-assembled clockwork camera (a mass produced item compared to the mechanisms in the OA) has worked faultlessly for around 15 years. And I bought it second hand then.

To add to your comment, from what I know of the independent watch industry, it's exceedingly difficult to branch off on your own as a watchmaker and survive long term. Those apprentices need salaries after all. It seems to take not just incredible technical and artistic ability, but a knack for business and entrepreneurship as well. In addition, the independent watchmaking brands tend to have so much of their prestige wrapped up in their namesake's persona, rightfully so in my opinion, that it makes it difficult for them to survive once they are no longer able to lead the company.

Also, I believe that even amongst the highest echelons of independent watchmakers, few are able to survive on their brand alone and rely heavily on either restoration work, work for larger more established brands, or a combination of the two. Even guys like Dufour and Voutilainen, two of the most respected independents in the watch world, partake in outside work for the big brands like Patek, VC, and AP.

If anyone is interested this is a post on a fairly recent visit to Beat Haldimann's workshop[1]. One of my favorite articles on these kinds of visits is from 2006 and involves a visit to the home/atelier of a former French kickboxing champion turned watchmaker[2].

[1]http://www.watchprosite.com/independents/a-true-discovery-my...

[2]http://www.watchprosite.com/richard-mille/alone-with-the-rm0...

Looking at link [1]

I wonder if those huge street 'watches' are actually apprentice pieces? The large scale of the movement making them easier to make and, I presume, less susceptible to small errors in the making of the parts?

Kikuno does not because he has made only a handful of watches. But the income from the kind of work he does - intensive labour, low volume and extremely esoteric mechanics and design - means he will never have the kind of commercial success to make it a big business.

There is only one independent watchmaker ever who has become a multimillionaire (approximately CHF125m net worth) and that is Franck Muller. But his business (which he no longer owns) is a vast, mass production enterprise.