Presumably they're now focusing on areas of the market they weren't able-to previously due to the limitations of the early generations of the Apple Watch.Focus on the mass market, not the minority space. Oh, what's that? Not enough profit?
I think its a good move depending on the feature set and crucially, the battery life of this new Watch. If they can get a very long battery life, whilst offering everything they do today and the move advanced fitness features of the premium Garmin & Suunto devices, then there's definitely a market there. The Apple Watch as it stands, has come on leaps and bounds in terms of battery life when on GPS, so I've no doubt they are going to have people moving to them from some of the lower end Garmins.
I'm pretty sure the most expensive Garmin watches are up there at the $999 end of things and whilst they're brilliant for the fitness stuff, the rest of the smartwatch things aren't as good as Apple from what I've seen. But there's also a lot of brand loyalty and a real focus on the feature-set with people who buy that sort of watch. So it would be interesting to see what Apple could do to tempt them away. I guess for starters there would need to be a much more advanced set of workout and recovery stats available.