Fundamentally the iWatch is a peripheral.
Pricing it in the same price range as the main device (iPhone) is an awful idea. Nothing about today sold me on the watch, Instagram on a smaller more fiddly screen? nope. Sending my heartbeat to someone? Why would I want to do that?
Either this product makes it to 2/3 iterations before being canned or Apple is going to have to drop the prices significantly and develop an unbelievably new and fresh UPS for it. I can only see the first one being a huge success due to Apple-halo effect, then sales drying up quickly as word of mouth spreads.
Today solidifies my opinion Apple is becoming less and less focused on the 'core', professional Mac users as well. No update on the Thunderbolt display after 4 years? Nope. Multi-coloured 'cute' MacBooks? Yeah, apparently.