Storage options

While I agree with your premise here is an alternate theory.

The Sport will be $350 and the Watch likely to be $1000. This leaves a huge gap for the Sport to offer at least 2 storage options to fill in.

EDIT: Here is a prediction I made in the Pricing Prediction thread.

8GB 38mm $350, 42mm $450, Space Gray $400/$500
16GB 38mm $450, 42mm $550, Space Gray $500/$600

 

The Sport needs the most storage, and I hope it's at least 8GB. (Unless it reshuffles its music library every time it comes in range of the iPhone?)

 

I don't think the capacity is going to be that high, simply because of how long it would take to transfer gigabytes worth of data over a Bluetooth connection.

 

As they have identified the computer to be a single S1, I doubt there will be additional capacities, especially in gen 1. As another poster said, there are already a lot of options. Fashion likely will drive the higher lines, not function. The sports watch wouldn't be the one to get a higher capacity even if there are more than one available, as it likely will be the least expensive.

 

for what, music?
i suppose listening to music using bluetooth headphones might be nice.

 

Even for a music library, there are very few cases where it cannot just grab the song over bluetooth from the iPhone. I imagine they will stick it with 8GB NAND flash for the OS and apps and get everything else via the iPhone using low-energy bluetooth. You'd basically be using it as a bluetooth controller for your iPhone's music library. After all, it doesn't have a headphone jack, you won't be playing music off of it directly anyways.

 

WiFi hotspot to iPhone according to Apple.

"...Apple Watch also features Wi-Fi 802.11b/g and Bluetooth 4.0 to pair seamlessly with your iPhone...."