I've been working on wearable computers since 1994 (http://www.media.mit.edu/wearables/lizzy/oranchak/witintro.html) and I believe strongly in the concept. The smart phone has delivered nearly all the promise we had hoped for except hands-free operation. The cell phone watch is not new. I bought one that was made in China and wore it for years. In fact, I showed that watch at the Gadget Show during the 2008 International Symposium of Wearable Computers in Pittsburgh and I had been using for a couple of years at that point.
The watch doesn't offer a purely hands free experience, true, but I never lost that phone; I still have it. Answering calls is possible with the watch alone but a bluetooth headset is much more preferable. Nobody knew it was a phone until I received a call. That was generally followed by shock and amazement. I used it to track my billing hours. It was always there. It was pretty great, really.
The adoption of wearables has always been hampered by fashion strangeness. The watch format does a nice job of dealing with that. The screen size is challenging. Mine had a tiny little stylus and using it was merely possible and not much more. But, I could have a meeting with clients and nobody ever questioned it. When I wore my first wearable to its public opening, somebody on the subway asked if it was a bomb. The early wearables made the wearer self conscious in public; you had to be prepared to be stared at.
One of the early concepts proposed by Motorola was a constellation of devices that, together in synergy, becomes a full on wearable computer. That, I believe, was the project that first floated the idea of an ear bud headset. They, too, seemed strange at first but they have become widely adopted. That's where we are heading.
So, now, the electronics have gotten smaller, power consumption reduced to the point where battery bulk is reasonable, and infrastructure is in place to support wearable computers. Wearables are becoming real. Yet, there are still challenges. We hoped that head mounted displays would be key but we are still struggling with them. That's a field that I have been working on for the last decade. I know the challenges intimately and we are not there yet. In the meantime, the watch format is a viable intermediate step.
As for Apple coming to save the day: Frankly, I don't understand why people are so enamored with their offerings. They don't do anything different in my opinion. I prefer the Android approach that "opens the innovation tent" to everyone willing to give it a shot.