I went back and listened to John Gruber's The Talk Show podcast from back at the end of September where he and Ben Thompson discussed the Watch, and ... especially after listening to them, I kinda think that the S1 needs to be upgradeable if the Watch is to be a viable product category. It would immediately transform the perception from a "disposable consumer electronics device" and potential terrible investment into a must-have.
There are a few arguments that the podcast addressed that have come up in this discussion:
1. That is a very un-Apple thing to do. Almost everything about the Apple Watch is a departure from the traditional Apple approach. This is a first-generation product that is offered in three "collections" with multiple configurations. It's an incredibly customizable product. It's being approached as a device that will have different uses for every user. It hasn't been released yet and it already has an SDK, will launch with third-party app compatibility, and they've already announced that it will allow native third-party apps in the future. (The traditional Apple approach is to wait a generation or two.) The Watch will also require a massive departure from Apple's traditional retail approach, is already being marketed differently, and you even have them marketing three different tiers where the only differences are the case material and the price. The Apple Watch is the most decidedly un-Apple-like product they've ever released, but they're doing it in a smart way.
2. Apple doesn't even let people swap out their own batteries. Just like Apple wouldn't let people swap out their own S1 chip. Obviously you'd take it back to the Apple Store for a replacement, just like you can already do with your Apple products' batteries.
3. It limits future design. The only real limitation on future design is the way the S1 plugs into the device. Everything else can be designed around. Just because the S2 or S3 may be smaller than the S1 doesn't mean Apple would be incapable of swapping them out, as long as the one key component is the same.
More importantly, and this is my own belief, Apple is going to make a major push to change design drastically between generations. That's the only way this product is really going to work as a combination fashion accessory/wearable computer. People are going to need to visibly distinguish the 2015 Apple Watch Collection from the 2016 (or however many years between generations) Apple Watch Collection. Why? Because that makes each generation of Watch stand on its own as a desirable, collectible product.
See, that's how you get around this point:
4. Apple would never do something to keep you from getting a new watch every X years. This is faulty for a few reasons. First, if the Watch is to be a success as more than a cool gizmo, it needs to be something you can get and keep for a long time--meaning aiming for obsolescence for the sake of the upgrade cycle is actually a detriment to the product's success. Second, what's better? Getting people to spend loads of money on a higher-end, upgradeable Apple Watch upfront then charging them $250 for service every couple years, or pushing most people to buy the Apple Watch Sport because it's cheaper and therefore makes more sense as a disposable product? Third, if Apple gives each generation of Watch its own distinct look and feel (rather than reusing the same case or making small refinements), people will be encouraged to not only keep their older Watch, but buy new ones that fit their personal style. And given Point 1, that this entire product category is decidedly un-Apple, that makes a lot of sense.
Making the Apple Watch an upgradeable product does not mean the end-user will be able to swap out chips on a whim. It means that you will take the Apple Watch in for service, like you would a traditional analog watch, and pay a fee to keep it running for years beyond the lifespan of its original components. It means that the Apple Watch will make the leap from consumer tech that you use for a few years and then replace, to something else entirely. Apple isn't stupid, and they made some great hires to help bring this product to fruition.
This product exemplifies Apple's "Think Different" approach, and trying to apply the traditional Apple approach to this device is what's keeping so many people from seeing its potential. Because Apple is tossing out their old rulebook for this one, and making a modular, upgradeable System-in-Package that can extend the life of an individual unit by years is part of that.
Of course, just because it makes sense doesn't mean it's going to happen. But I have high hopes that this is where Apple is going, because it would prove just how far ahead of the competition Apple currently stands. Nobody is making their smart-watches to compete with anything except other smart-watches and fitness trackers. Only Apple has positioned their product to compete with genuine watchmakers. And if they can make the Apple Watch something that screams longevity, that will go a long way towards changing people's perceptions of this product.
For me, the more I think about it ... it has to have this kind of upgradeability, or at least something to make it last more than two to three years before I need to replace the whole device. Otherwise, I'm just not going to take the dive on an Apple Watch, and you'd be a fool to buy the Apple Watch Edition.
If there's no upgradeability, only the Apple Watch Sport makes sense to buy because only the Apple Watch Sport is positioned to be a disposable consumer tech niche product.
I know I'm probably wrong. But I'm hopeful, because I want tis product to live up to the potential Apple claims it has. And this is the biggest currently-missing piece of the puzzle to make it reach that potential, even more-so than battery life.