Forget Rolex. This is the Rolls-Royce of watches

For $8,700 (U.S.), Swiss watch company Romain Jerome will sell you a wristwatch with a rusty, pitted steel case. The tarnish reflects the fact that the metal was once part of the Titanic, and spent decades at the bottom of the Atlantic, then was hauled up prior to the wreck being declared a protected site in the mid-nineties.

For $23,050, there’s a Rolex with a face made out of a thinly sliced chunk of meteorite, rimmed in white gold. For $24,800, your wrist can be one of just 247 on the planet sporting a hunk of polished steel designed, in a limited run, by watchmaker Panerai and auto maker Ferrari.

Watches in this price range are still great conversation pieces. They do keep time. Yet high-end buyers are walking right past these gimmicks to drop anywhere from $100,000 to $1.3-million on a watch design that hasn’t much changed in more than 200 years. Because what you really want to reveal when you pull back your sleeve is something called a tourbillon.

What, you ask, is a tourbillon? It’s the watchmaker’s highest achievement: a collection of hand-crafted gears and springs designed to keep an incredibly accurate count of minutes passing by offsetting the influence of gravity or any other outside force.

The guts of a tourbillon watch, known as the escapement, are built to rotate and are usually left visible. The few high-end manufacturers, all Swiss, who turn out these gems take six to 12 months to produce each watch.

The concept was developed in 1795 by Abraham Louis Breguet, who is to Swiss timepieces what Tim Horton is to Canadian coffee.

Napoleon bought three Breguet watches – one of his wife’s sold at auction this year for $1.3-million. Winston Churchill wore one.

Now, it’s Canada’s real-estate developers and financiers who quietly boast of their success by strapping on these timepieces. They join a club that also includes Hollywood royalty: Arnold Schwarzenegger and Nicolas Cage are collectors of tourbillons from watchmakers such as Audemars Piguet and Patek Philippe.

“A generation ago, buying a Rolex was seen as a sign of success,” says Tyler Markoff, manager of Royal de Versailles Jewellers. “Now, Rolex is still a great watch, but the goal for many buyers is to own something more exclusive, a tourbillon watch.” And Mr. Markoff recently sold three watchesbased on Mr. Breguet’s work to a long-time customer, for $1-million, during one visit, and took a $100,000 order from another customer for a Panerai tourbillon that won’t be delivered until the summer of 2009.

“It’s a banker’s watch, understated yet elegant, and for those who understand the engineering it’s got real wow appeal,” Mr. Markoff says. “They are pieces of art, or the equivalent of a Rolls-Royce.”

The larger trend ticking away in high-end watches is a move toward increased spending by men on accessories. North American spending on men’s jewellery nearly doubled in the past three years to $6-billion, according to Pam Danziger, founder of Unity Marketing, which advises luxury retailers.

Those who start the journey to a $100,000-plus watch quickly come to a fork in the road. There are gem-encrusted pieces that are more jewellery than clock, and there are highly technical pieces such as tourbillon-style watches. For reasons firmly rooted in boys’ fascination with toys, the new-money lads in the financial and software worlds are showing enormous interest in techno-timepieces.

Combine that surging demand with the relatively limited production from Switzerland, and you end up with a bubble that speaks to the wealth and impatience of our age.

Patek Philippe, one of the toniest Swiss watchmakers, turns out about 15,000 pieces a year, while Rolex ships 600,000. Among the top-end pieces is something called a Sky Moon tourbillon, a double-sided watch that charts the movements of the stars on one face. The price tag is up to $900,000.

Buying these Patek Philippes, according to a recent piece in Time magazine, means submitting to an interview with the company in Geneva, getting approval, then waiting one to four years. For some well-heeled buyers, including the hedge-fund crowd, the wait was intolerable: Time found buyers dropping $1.2-million on slightly used Sky Moon watches in auctions, in order to avoid the line.

To explain this extravagance, the magazine quoted Robert Frank, author of Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, as saying: “The challenge for today’s rich is to set themselves apart from the merely affluent.”