And they said the same thing about high-end film cameras and custom horse-drawn carriages at one time.
I can see the thought behind your analogies, but there is a decisive difference:
People already have Choices available that perform the basic function better then mechanical watches.
Any quartz clock is bound to be more accurate then a mechanical one.
Any digital watch lets you read the time more accurately then an analog one.
Some even have extra functionality like calculators build in....
My point is, people actively choose to use devices that perform their core functionality worse then much cheaper alternatives.
To me that is because I realy LIKE the way a well designed analog watch looks, i LIKE the fact that one of my watches is almost a hundred years old (my grandfathers first wrist watch) and is still very much useable (in fact with it's new strap it even looks stunning).
And last but not least, I LIKE wearing an analog watch because with all it's imperfections, it serves me as a reminder to wind down a little in this fast paced digital world. according to market trends there seem to be a lot of people who think the same way. (77% of watches sold today are mechanical!)
In addition to why I do not think analog watches are dead in the foreseeable future, here is why I am sceptical that apple's watch will be a game changer:
First, and most important: it is an iOS only accessory. In other words, the possible consumer base is already very limited.
Just as an example: Samsung managed to sell approximately 400,000 smartwatches in 2013 (they claim 800,000 but according to the vast majority of analysts that figure is massively exaggerated). In the same year they sold 300 million smartphones (as an indicator of the possible customer base) so for every 750 phones sold they managed to sell just one smartwatch...
Both smartwatches share some shortcomings (primarily batterylife) but I'll give the apple watch that it does look slightly better, so apple may be able to sell twice as much.
Gerneraly there seems to be the notion that apple customers have more available income so lets add another factor two for sales, just because "we can" (afford that accessory).
Plus apple usualy gets very good press and it's fans are very loyal...lets double that number again.
Personaly I would deduct a big chunk of customers who think a product that lets one send heartbeats and shiny self drwan pics to others belongs to pony riding 12 year old girls with pigtails, and is rather embaressing to wear as an adult...but that is just a sentiment that may be very specific to me...lets leave that out of the equation
So lets assume all this works out, apple would be able to sell 1 watch per 90 sold iphones (actualy 93.75 but lets round that down in apples favor)
Now lets see, the "possibel customer base" is 150 million (sales in 2013) so when we devide that by 90 we would get total sales of just under 1.7 million.
While that figure will clearly make apple the leader in the smartwatch segment, global wrist watch sales are around 1.2 billion total so that would equal 0.14% of global marketshare. Even considering the swiss watch market only (29.2 million sales with an average prize of 739$) that would be 5.82% (if all apple watch customers would otherwise buy a swiss watch, and would not do so afetr buying the apple watch)
Obviously those numbers are not scientific. They just serve to show why I think the apple watch will not be a game changer as the iphone was.
There is also a "technological" difference between the two products: all the tech that was used in the iphone was there...it "only" took steve jobs ambition and insight to combine those technologies into a game-changing package. For smartwatches that tech just isn't there yet...battery life that is worthwhile, a display that may be build in the top glass and while not in use will still let one see that beautiful analog watch, true added value that can not be gained from using just the phone and a watch (plus maybe a fitness band for work out)...
All in all I do not think that the apple watch will fail, but it will not be as big a deal as apple would like it to be and maybe even go the same way as apple tv and the mac mini and be more of a hobby to apple...