Watch manufacturers often insert phrases like “limited edition” and “special edition” into their marketing. Those terms sound similar, and some buyers may be a little confused on what they are actually getting. The difference comes down to how many of each item is manufactured.
Special edition watches may be created for any number of reasons including charity events, to generate buzz or maybe even let the manufacturer expand their creativity. Special editions may modify the design of existing models or be completely new. This should be considered different from slow evolutionary design changes that can occur over the life of a watch model.
Limited edition watches are just that… limited in the numbers produced. The terms are not mutually exclusive because a special edition can also be limited in production. They are almost always marked by a fractional number such as #3/200. This shows that only 200 were produced and that this is the 3rd one of the series.
Generally speaking, lower numbers in the series are considered better. I am not sure that I get this, but for sure #1/200 is more sought after than #59/200. Perhaps, having the first of anything gives bragging rights, even though the whole set of 200 watches was likely produced at exactly the same time. Even small batches of watches use modern mass production techniques so that all the cases, all the hands and all of the dials are generated at one time.
Another game that people play with batch numbers is ordering their lucky number, birthday or anniversary date. This option is not always possible since some big brand limited editions are distributed to select retailers around the world. Small micro brands may be more willing to let customers request a number if they are selling all the watches from a central location.
The smaller the batch, the rarer a watch is so a watch numbered #3/50 is rarer than #3/250. That second number of the fraction is all that will ever be produced in the world…ever. This puts the owner into an exclusive club of a very few people.
Exclusivity is one thing that drives watch collectors. We tend to want to be individualistic and have something different on our wrists than what the masses have. That can explain some of our aversion to the Apple watch… millions of people own one. There is nothing worse for a watch collector than seeing a pimple faced 14-year old kid wearing YOUR watch. Below is my Swiss Army Power Gauge Limited Edition watch from 2008. Only 333 were made compared to the millions of smart watches Apple churned out. (Not dissing the Apple Watch here. I like those too.)
One more factor to consider is the attrition of any given number of watches over time. Just like cars, stamps or any other collectible item, the finite number of limited edition watches will diminish over time due to loss, theft, neglect, breakage and perhaps by being buried with the owner. In 20 years, the original 200 watches may have dwindled to 50. Just watch the prices paid for rare Rolexes from the 1950s, and you can see that concept in action.