The TV market is bad, but the watch market is not great.
What they should be trying to crack is the in-car nav/infotainment systems - the iCarStereo. Current nav systems are somewhere between total-suckage and so-distracting-they-cause-accidents. Bluetooth pairing is painful when it even works, calling systems don't integrate with smartphone phonebooks, there is no way to share contact addresses, and the voice controls are no better than someone reading a "Car navigation is attempting to quit, cancel or allow?" dialog box. And the interfaces are so poor as to command the driver's full attention for seconds, looking for touch-screen items or clicking the right button, taking focus off the task of driving.
People would trade their old cars in for one equipped with an Apple iCarStereo if it solved those problems. A watch? It will take a lot of luck for it to be more than a fashion item that falls off the radar in a few years.