Chupa, if you are someone that even knows they exist then you probalby use it on a regular bases, therefore it has a real world use for you. Whether it be for a hobby or your job. $400 is nothing.
$400 on a nothing more than a toy only to update it every 2 years is a different matter. Apple will have no option but to release a new version over 2 years, otherwise they will have to provide one hell of a lot of software compatibility to old versions in new iOS releases. Something everyone knows they don't do.
Yes, but if its for a hobby then by definition it's a toy. I don't need a GPS watch to run, just my legs and a good pair of shoes. I don't need a heart monitor either. These are just fun things to have to help improve, incrementally as that is.
My first smartphones, a series of Palmphones -- all toys.
My first iPod ($500 in 2001 for a music player was quite expensive but didn't hurt that product one bit) -- 100% toy. 5GB didn't go as far as I thought! Upgraded every year until the iPod Video, my last full sized iPod.
My first iPad $729 or something, not too far off from a MacBook -- toy deluxe. Dumped it for the 2 a year later.
All of my Nikon DSLRs -- very fun toys. Nikon updates my model about every 2.5-3 years. So far I've upgraded every time because I find the feature set compelling & resale value of older bodies is decent.
I suspect resale value of the "iWatch" won't be so great because it's a wearable so, I probably won't upgrade as fast as the above toys, but if it provides me with utility and joy, sure bet I'll upgrade every 3-4 years.
I also think $400 is for the high end model, just as the original iPod was the high end then came the less expensive mini, nano, and shuffle, all with their own features and identities. It's common practice in consumer electronics to soak the early adopter. I have no complaints if it's a compelling product.