OK, I don't see those "most" people when I'm out and about (such as in NYC this past weekend and in major airports last week and this week). Do some people do that? Sure. But "most" means more than "some".
Nevertheless, why is an iWatch going to change that behavior? If they don't want to wear a watch now because they can tell time with their iPhones, why do they want to add a watch then when they will still have their iPhones?
And, by the way, what a CEO says doesn't always prove out. Jobs: "Why do people want video on an iPod?" is one good example. Here's some too:
http://www.techlicious.com/blog/5-big-flip-flops-from-apple/ If you do some searching, you can find many more.
If Cook actually believes that, why is Apple apparently making a watch? What can it do that that iPhone in their pocket can't? All I've seen is these rumors of various health sensors, which probably could be engineered into an iPhone but probably works best (or at all) with direct contact with the skin. OK. That's something. How excited are the masses about that? Is there some application of that? Sure! But is that enough to motivate compliance with a single design or two? I don't know. When I personally think about that part of the rumor, I think of this more as a health bracelet than a watch replacement. And then I struggle to seeing the masses jumping on this.
The ONE scenario that kind of makes sense to me goes like this:
-what is Apple's bread & butter product? The iPhone
-why is it so valuable to Apple? Most of Apple's profit is in that one product.
-how is it so profitable? It's subsidized so that it can be apparently priced as cheap as free* while still getting Apple paid by others at the full price with full margin
-what else could have that very lucrative, subsidy model? Ever notice all the medical tracking stuff pitched as free* in commercials on television? In that case, it's medicare or insurance that pays the subsidy to support the free* price.
With that chain of thought, I wonder if this iWatch concept is taking a crack at a new subsidized product model. If so, the iWatch might be able to be priced cheap* or free* yet Apple still gets paid a profitable, full price by another group of companies and the government via insurance or medicare.
iPhone didn't sell well to the masses when it first launched and Apple was trying to get the public to pay full price up front for it. Only when the subsidy model was adopted did it roar (and Apple still fully got theirs). If I'm Apple, one of the things I do is look for where else I could replicate that very same arrangement. One place is definitely these free* medical products. Jam a number of those into something like a watch and kill 6-10 birds with one stone. Subsidized make the price too good to be true. The masses adopt it. That it might also be a watch or maybe have some iPhone alert and app functions is an added bonus. It's cooler than similarly cheap or free watches that are just watches, so the masses forego style diversity to have the coolest (seemingly) cheap watch around.
While that's an odd idea, that's the path to the masses that I can see for something like an iWatch. Probably won't happen but maybe that's the play.