I think it's hilarious to see people push the idea of -a "killer app". There's no such thing. What's the killer app on an iPhone? iPad? Gany of the Galaxy phones?
The concept of the killer app/function is taking a device that is interesting or a curiosity and turning it into a must have, there is definitely some added convenience in the watch but nothing makes it a must have device as it doesn't replace the phone.
The smart phone itself is the killer app (or function), as we can see by how many functions it performs and how many of those devices that solely performed those functions are fading away (P&S cameras, GameBoy type devices etc), the watch right now while interesting is more duplication of an existing device, so do you really need to spend $350+ to duplicate the iPhone?
Another item to watch is the replacement cycle, as we see with iPads the upgrading isn't occurring at the same pace as the iPhones, we still have our 1st gen retina iPad and no need yet to upgrade, it might be nice to have something smaller/lighter but as it is primarily used on the couch the need to spend a few hundred $$$ isn't there.
What will the market be for used watches? If you are stuck with a minimum $350 watch and wanting to upgrade every year but the used market says $50 is the price then you might find it a less attractive purchase.
I bought a Microsoft Band on release day and quite enjoy it, you change the way you interact with your phone as the vibrate alerts replace the need to have audible alerts on the phone, etc etc, and no doubt the watch will do that too, but at $200 the purchase price is more attractive and less of a worry if it didn't work for you.
It will be interesting to see where things go over the next 6 months. If it was able to do continual glucose monitoring (like many rumors suggested) I think a lot of diabetics like myself would be buying it in a heartbeat, that is a game changer in many ways.