When the rumor came up that Apple is working on a smart watch, a lot of people got pretty excited. More interesting, a lot of big hardware vendors started working on smart watches, which some just got announced. E.g. Sony and Samsung.
The main question still is, how could a smart watch change your life? I doubt there is a big benefit in having your phone hooked to your watch constantly. Especially as your phone is just 30 centimeters away.
But more important, a watch is something very special to most man (sorry ladies, but I think they are the main audience for a smart watch) wearing one. It is the only peace of jewelry a man is wearing in the usual case. And in addition to that, it is usually a pretty expensive, but classical watch like a Rolex, Patek Philippe or Panerai.
Can you imagine business man running around with a display on there hands just to see the latest Tweet or Facebook update from his mates?
Brings me to the conclusion that such a thing would just be a niche product.
If Apple is really hopping on this wagon they are really lost and out of ideas!