I think Apple needs to focus on, Great battery life, durability, (which includes being waterproof, sweat proof, scratch proof, etc.) and a product that would suit a larger demographic than just health geeks. Let's face it, the majority of people aren't into fitness so, for the iWatch to be successful it is going to have to have multiple exceptional features to get the common consumer interested in such a product.
What I would like to see:
Week long battery life
Waterproof and capable of withstanding atmospheres of depth (comparable to high end watches)
A screen that is fully clear in direct sunlight
Multiple sensors besides health related (TV control, iOS device control, etc.)
HIGHLY durable
Reasonable price