I actually work for a Swiss watch manufacturer. Sales have notably dropped in the US and Asia (it's the same for a lot of other brands), as we sell watches within the 400-1000 CHF range.
However, funnily enough my bosses do not think that the AW is factor. I think they underestimate the impact the AW has. Of course the AW is not the sole problem here but the drop is not just because of economic issues around the world.
I've been reading about two widely different reactions by Swiss manufacturers. One, mostly coming from Richemont and LVMH, has been to buy back unsold inventory from dealers and, in come instances, destroying the excess. The other, mostly from Swatch Group, has been to declare unsold inventory as an "investment" for when sales start to take off again. I wonder which reaction is more realistic.
Do you guys find you have no need to look at your iPhones now you have the watch then? Has the habit of checking handy information on your smartphones reduced somewhat?
I look at my phone a lot less when I'm wearing the AW. More specifically, I don't feel like I always need the phone nearby or on my person. When I went out with my wife yesterday for groceries and to the mall, I left my phone in her purse the entire time. I didn't want to revert to the [increasingly old] habit of poking around on my phone while she browsed (you'll see husbands and boyfriends doing it
all the time these days), yet I knew that if someone really needed to get a hold of me, they could.
When I'm home, I'm fine with leaving my phone just laying around somewhere. Via the AW, I can screen emails and check weather radar while I'm on the john, yet I'm not going to be tempted to scroll through fifteen feet of Twitter, either. Between my AW and the iCloud connectivity with my MBP, I really don't need to grab my phone for every little thing anymore.
When I
don't want to be connected to anything, I wear one of my other watches. When my wife and I went on a little trip last week, I wore the Citizen that she had bought for me, and brought my AW just in case I went for a jog (which I eventually did).
(my attempt to stay disconnected was mostly futile, however, because most of the other people staying with us were often noodling around on their own phones, tablets, and laptops... hey, I tried...)
I've left Hodinkee and Watchville turned on on though so I get all the latest watch news as soon as it goes live.
Hilarious.

"Where do you get your news about Swiss watches?" "On my Apple Watch, of course!"
[doublepost=1483627675][/doublepost]Just to add a little more --
When Schiller was talking about how each device along the chain needs to make a case for itself, the reason for the AW becomes a little more clear.
Just like with regular watches, there's some information that's really handy to have at -- literally -- arm's reach. Quick texts, email notifications, weather, phone calls, and (oh yeah) the time can be done briefly and with little hassle. When you need to do something more complicated -- and there's no way the tiny interface of the AW is going to cut it, if you're realistic -- the phone is the next logical step. The phone is a little less handy and a little less convenient, but it's just more capable enough to fill in the gap between the watch and a tablet or laptop.
I've described the range of computer devices as laying along a spectrum of convenience versus capability. At one end, you have ultra-convenient, and at the other, you have ultra-powerful. At the Powerful end of the scale, we've topped out a long time ago -- that's where you have your building-sized data farms and simulation supercomputers. Massive power, but horribly inconvenient, because you can't even carry one in a U-Haul truck.

The phone had been occupying the spot at the Convenient end of the scale, and to make a device even more convenient, a little bit of capability needed to be sacrificed.
So,
no, the AW will not be a smartphone replacement; but it has pushed the scale farther to the Convenience end.