$350 for a sport watch is a lot for most people to pay.
For most. But Apple caters to the minority of customers who have money to spend, and lets Dell and HTC makes roughly zero profit selling laptops and phones to the rest.
Most scarfs in the Burberry store are above that price. And that Burberry store had customers in it buying stuff (granted, less than in the nearby Apple store, but more so than in the nearby Microsoft store
Also, my Garmin GPS watch originally cost more than $350 (including heart monitor strap). So that price is not out of line for someone who doesn't buy wearables just for fashion.