Demand for high-grade watches with mechanical movements is continuing to grow. Most watch houses are brimming with confidence and optimism, but this is tinged with a little caution.

The specialist companies that produce the basic movements, or ebauches, that so many companies depend on may have underestimated demand. As a result, there are whispers that later this year there may be a shortage of movements.

If this proves to be true, then some models may be in short supply by Christmas.

Switzerland has long been renowned for the quality of its watches and in most parts of the world the words 'Swiss made' on the dial are recognised as a sign of quality, but now 'Made in Germany' is also an epithet that signifies high quality.

Since the reunification of Germany, companies in former East Germany have disentangled themselves from the co-operatives they had been herded into, and many have come back to life and achieved a level of quality that clearly appeals to collectors.

Among these are Glashutte Original, Nomos, Union, Tutima and A. Lange & Sohne, which is now part of the Richemont Group and exhibits at the Salon International de la Haute Horlogerie exhibition in Geneva.

After the excitement caused by new materials and escapements launched in the past two or three years, 2007 is clearly a year of consolidation.

Items launched in the past year or two using new materials and technology are still flourishing, but most of the manufacturers that have been leading the way with these products seem to have paused for breath.

After racing to be among the first in the market to announce movements with components made of silicon (or silicium) or even parts such as balance springs made from diamonds, companies are now trying to build up production so that newer materials can be used in more models.

It seems these companies are waiting for confirmation of the benefits (and long-term reliability) of these advanced new materials.

As a result, few exhibitors in Basel this year offered radically new products - although there were some notable exceptions. This year the emphasis from most companies was on subtle changes in style, colours and sizes.

Patek Philippe summed up its developments this year by referring to 'expanding its leadership position with refined new versions of classic models and two new Gondolo watches'.

The company confirmed that 2007 was a year in which it was concentrating on consolidation - and it was not alone.

The World Time model introduced last year in white and rose gold is now available also in platinum. The Celestial, introduced in 2002 in white gold, has been replaced by a yellow gold version.

After an 80-year hiatus, Patek Philippe has brought a new lease of life to the legendary Chronometro Gondolo and, six months after its introduction, the Nautilus collection has been enriched with gold versions.

In keeping with the enthusiasm of many manufacturers to develop mechanical watches specifically for women, Patek Philippe has launched Calatrava Travel Time for women on the move.

Trends in the watch industry are cyclical - and for the past three or four years there has been a relentless move towards watches with larger cases.

This year, we may be seeing the first signs that this trend may be reaching the end of its cycle, but it is too early to be certain.

A few companies exhibited larger watches than before, but other companies this year were more cautious - or perhaps anticipating the next trend, showing some watches with smaller cases than last year.

Among these were a few models with slimmer, more classical lines than seen recently.

Watch designers this year seem undecided, too, about their favourite materials for watch cases. In recent years there has been a move towards rose gold instead of yellow gold, but this year the trend seems to have been put on hold.

Many rose gold watches are still to be found in collections from the major companies, but some launched new models in yellow gold instead of rose gold, while others report that gold and steel is a combination that is coming back into favour.

Designers this year agree to disagree about their choice of gold, but they are in much greater agreement about the use of other materials.

Ceramic, which was pioneered as a material for watch cases and bracelets by Rado, is now in wider use for cases and bracelets, and also for bezels and dials.

Black rubber has gained in popularity as a material for watch straps, but this year other parts of watches are also being clad in rubber, such as the vulcanised rubber bezels of some of Corum's Admiral's Cup models.

In a year in which relatively few major new collections have been launched and trends are difficult to define, one theme clearly apparent is the emergence of yachting watches, spurred by the growing popularity of major yachting events where teams are now sponsored by the big watch companies.

Shinji Hattori, president of Seiko and a direct descendant of Kintaro Hattori, who founded the company in 1881, said that his company loved the challenge of innovation and refinement.

He believed in 'emotional technology' because people wanted an emotional relationship with their watches. Seiko's important new Velatura collection is one example of this approach.

These are high performance watches built for use in the sea and especially for use on yachts. They are sailing watches for amateurs and professionals in automatic and hand-wound versions. They have been designed in collaboration with professional and amateur yachtsmen and have features tailor-made for yacht racing.

At the heart of the collection are two new calibres, Kinetic Direct Drive and Yachting Timer, that have been designed expressly for Velatura. This new range comprises 11 high-performance marine watches for men and women, and each model combines innovative function with refinement in design. Velatura marine watches take their place alongside Seiko's Premier, Sportura and Arctura ranges.

Rolex, long-known for its Yacht-Master watches, this year added the Oyster Perpetual Yacht-Master II Regatta Chronograph, claimed to be the first watch with a programmable countdown feature with a mechanical memory.

As a result, it can be set to match the countdown time of each regatta. It is intended for recreational and experienced skippers and will be an indispensable tool at the starting line of regattas. Development of this new 4160 Calibre model took 35,000 hours and all 360 parts are designed and manufactured entirely by Rolex.

TAG Heuer has acquired a well-deserved reputation for technical innovation and in Basel it launched an important new quartz movement, Calibre S, which represents a breakthrough in quartz chronographs because of its use of five high performance bi-directional motors, each capable of achieving twice the torque of conventional quartz watch motors.

As a result, it is able to measure and display all watch and chronograph functions using the same full-sized central hands. Its features include a chronograph that is water resistant to 300 metres with 1/100th second precision, as well as a perpetual calendar.

The discs in the lower part of the dial serve two purposes - in time mode they display the perpetual calendar information on their retrograde displays, and in chronograph mode they show elapsed time to 1/100th second.

First shown as a prototype in Basel in 2005, the Calibre S movement was launched earlier this year in the TAG Heuer Aquaracer Calibre S Regatta. Now it is also being used in the Link Calibre S Chronograph, which was on display in BaselWorld.

Corum has a long tradition of making timepieces for the yachting community - as well as classic watches and avant-garde designs - and this year it has new models. They include the Admiral's Cup Challenge 44, which is water resistant to 200 metres, and the Admiral's Cup Tides 48, a new version of one of the flagship models in this line.

In addition to showing hours, minutes, seconds and moon phases, it displays tide coefficients and a daily indication of tide times. It even shows the state of the tide in progress, to allow the wearer to estimate the water height and current strength.

In keeping with this year's popular nautical theme, Bulgari introduced a Scuba Flyback GMT Chrono in 18-carat yellow gold with red and yellow hands. It was developed with the help of professional divers - and is water resistant to 300 metres.

Breitling has long been known for its mastery of the skies and of pilot's watches, but its involvement with the sea is not so well known. It began to conquer the depths of the seas in 1957 with its Superocean line and this year it pays tribute to its 50th anniversary with the launch of Superocean Heritage, a high-performance instrument available in two case sizes, 38 and 44mm. It is water resistant to 200 metres and is designed to offer easy handling underwater, combined with stylish looks that are certainly not out of place when it is worn ashore.

Dials and bezels are in black, chocolate brown or blue, and the easily adjustable straps are in woven steel, Barenia leather or rubber. The movement is a chronometer-certified automatic Breitling high frequency calibre, complete with calendar.

One interesting new launch at Basel was by Maurice Lacroix, which announced the Memoire 1, a watch the company claims will be the first mechanical watch with a memory.

Philippe Merk, chief executive of Maurice Lacroix, and Sandro Reginelli, design director, presented the new watch to just a handful of customers and press in a specially constructed hi-tech presentation room which was off-limits even to other senior members of staff.

The CEO and design director outlined this important new model but made it clear that further information would be released in stages until it was unveiled in Shanghai in November. It will be presented officially at BaselWorld next year.

What makes the Memoire 1 so special is that it has only two hands and a special disc, and yet it can display hours, minutes and seconds, and use the same hands and disc to act as a chronograph. It switches between chrono and time of day displays at the press of a button in the crown. While the time is on display, the chrono can continue to run in the watch's 'memory', and when the button is pressed again the hands move to 12 (or zero), ready to function as a chronograph. If the chronograph is already running, the hands show the current chronograph time when the button is pressed. In keeping with the gradual release of information planned for this watch, only one photograph has been released showing just part of the dial.

Other features to look for this year were dials with apertures that reveal a view of part of the movement, a theme pioneered by Frederique Constant in 1999 and now adopted enthusiastically by a number of other companies, including Zenith, with its Open Heart collection which has been further extended this year.

Women's watches with mechanical movements were also very much in evidence, including models from Zenith, Chopard, de Grisogono, Blancpain, Rolex, Hermes and Patek Philippe. Breguet's Reine de Naples in rose gold, set with 139 diamonds, is a true work of art.