watch thoughts
The reason that a watch is so tough to design is that people buy watches for fashion...either a certain watch brand, a collectible movement, watch size, weight, materials (stainless steel, sapphire, etc), specs., and that is a world in of itself.
Secondly, from what i know...watch movements have been more difficult to get, forcing watch brands to order the internal swiss movements months and years in advance, pushing up demand and cost. Even brands like Rolex are having a tougher time securing the movements they need (from swatch), to make their watches.
When Swatch and other swiss movement makers have such a lock on the industry, I can see why they have no time (or interest) in branching out to the smart watch category. I would also guess that the Swiss watch movement industry isn't hurting (like the music industry was at the time of the iPod).
In my opinion, the design of the watch is the key. You don't want it so geeky that people don't want to wear it for long periods of time. However, you don't want it so fashionable that it looks like you should only wear it with an Armani suit. I guess that's where Jony Ive could do something amazing!