$350-$500 puts you into the range of cheap trash and knock-off timepieces.
Well, the watch I'm wearing right now is a Seiko automatic that cost well below that price range; yet it has a fully in-house movement (right down to Seiko's own oil formulations) and it's accurate to within half a second a day (technically it loses 8 secs every 30 days on average, after regulating it myself). As you may be aware, Seiko's movements are so good that Tag Heuer famously used one of them as the basis of their own "100% in house" movement several years ago
Getting back to topic, though, I agree that real watchmakers aren't in any danger from smartwatches. Mechanical watches are highly fashionable elite items that are valued because they are rare, handmade works of art. It's like suggesting that oil paintings will be threatened by digital photo frames -- the markets for the two products are pretty much non-overlapping.