It's the fashion angle that will set Apple apart from the crowd, and make the smartwatch a acceptable fashion item, thus spreading its acceptance. Unfortunately, Apple can't figure out what to do with the watch. And you've just pointed out a problem pricing it the way they do. It's assembled with glue, unlike any fine watch a person might buy at a jewelry store, and unfirtunely that means it's more difficult to repair correctly. Even Apple's own website says replacing the battery means not being able to retest for water resistance. These are all basic things to watch ownership. So on the one hand Apple is treating it like an iPhone, on the other like a high end fashion watch. And they're failing at both badly.
You nailed it. I wasn't going to post anything (I've bad mouthed AW enough), but you hit the nail on the head.