That's the gap I have a hard time seeing the iTime/Watch crossing.
Watches have become fashion accessories more than functional items. Few men wear watches these days, and those who do usually do it to compliment business attire. There seems to be more 'casual' watches sold to women...but many of those are more the larger and bracelet style watches that are in fashion these days.
Apple seems to want to bring functionality back to the watch. But if it doesn't meet the needs of the decreasing watch market...you better bring a whole lot of incredible functionality to make it worthwhile to the people who don't wear watches.
I think it'll flop miserably. Not in that it's a bad device, but in that most people aren't going to see a value/need for it that they don't get from their other devices.
I wear a watch and a fitbit everyday. (One on each wrist) The iTime is supposedly going to have very intelligent systems built in for activity monitoring, heart beat monitoring, etc. This is where Apple is going to gain the ground and make the sales, because they will do all of these things right. (I am assuming, since all their other devices do things better in comparison to rival companies)
People are into fitness MORE THAN EVER today, so with an iPhone, and a iTime, paired with the new Healthbook software in iOS 8 people will snatch these watches up ilke hotcakes. IMO.