... and how much brand equity he's willing to throw away for no specific reason.
Not necessarily throwing away. If Apple is indeed moving towards a trend of prefixing products and services with "Apple" rather than "i", it's certainly a gradual one. The first instance was the Apple TV back in 2007, and now with Apple Pay and the Apple Watch. Clearly the "i" prefix is very well established, and like you said carries equity with it. The products are instantly recognizable.
But in a fast-moving sector like technology, you have to ask yourself when a brand has run its course and is old and worn out in public perception. Among naysayers, Apple and the "i" brand is a joke. Fandroids think that Apple is playing catchup and that anyone who owns at least one Apple product is "sheeple" or "iSheep". While this is clearly not the case, brand image is everything to a company that is as dedicated to design and user experience as Apple is.
Apple sees itself as a trendsetter. We've seen many companies over the past few years go through rebranding campaigns. Microsoft and eBay are key examples of a move towards simpler, more modern looking logotypes characterized by sans-serif and very thin typefaces. You could say Apple pioneered this with Myriad Pro for its product lines (MacBook Pro, PowerBook G4, iPod, et cetera). Now that everyone wants to go with that style, the only way for Apple to go is in the opposite direction, with a big, fat, all-caps typeface for the Apple Watch.
In terms of design philosophy, Apple is very similar to Mercedes-Benz in that respect. A new design element can come out on any product, regardless of where it sits in the pricing spectrum, and this trickles down to other products in the company's lineup (eg. the W201, the lowest priced Mercedes of its day, set the bar for design when the W140, the most expensive Mercedes, came out nine years later).
Watch? They're not calling it iWatch because they likely intend them to be high-end (predicted $999 for the stainless steel model and $4999 for the solid 18K gold) rather than some cute, consumer product.
