apple is likely going for the $500/$1K/$5K watch markets given the extreme quality and precision of the bands and case. I think they could take it quite easily. Their three editions I think delineate the markets they are after.
Nobody is going to give up a 10K watch for it of course, any more than someone will give up his 1960 mustang, but folks own more than one watch and most will probably move beyond analog watches.
Move beyond analog watches under $10k probably yes. I don't think above $10k will be affected.
In fact, I think it may drive more people to buy such watches.