One thing lost in all this... you always hear about companies caught flat footed, and then not seeing replacement technology coming and smacking them in the face. Apple is one of the few companies that build out the tech that will eventually replace them.
iPod was worth millions/billions, lets build a phone that will replace all MP3 players. Hell, even intra-line.... they killed the Mini (our fave hard drive player) then introduced the flash based Nano, then the iPod touch. There's sure to be a large amount of cannibalization up and down the iPod touch, iPad Mini, Ipad, iPhone 6, 6+ line. Hey, we'll sell you whatever, as long as it has an apple logo on it.
I see the watch as a toe in the water of a phone screen replacement. Maybe you use the watch all day. Maybe you use the phone.
So now Apple already has a hedge. So you're saying people may buy one, and have a high margin watch on their arm? Hey, we have one with an Apple logo on it. Or you say, people want to stick to their phone? Hey, we have one with an Apple logo on it, (surprisingly high margin compared to the industry).
It's a hedge. A very interesting hedge with a brand new UI (I'm a fanboy for any new UI interaction - taptic engine + Force touch kind of makes me say WOW, i'm a UI geek like that).
Maybe it will be a Newton (don't think so, it's already way past Newton numbers). Maybe it will be an Apple TV, nice, good numbers for any company besides one the size of Apple. Or maybe it will be iPad. But Apple should be congratulated for taking the risk, for having enough foresight to see possible competitors and neither ignore nor buy them, but create them. And it has the cash to let this one percolate a bit.