The watch is still an iPhone accessory. That's going to take time to mature, and will eventually be a mass market product (or more likely the non-Apple equivalents if Apple don't figure it out). Too many technical problems for the time being, but things will improve.
In the meantime, Apple desperately need their next big thing, and it seemed incredibly obvious to me even years ago that a full TV was a no-brainer. TV interfaces suck, I mean they are just _awful_, have you used a modern TV? If you don't own one, try out the controls next time you're at a friend's house. Be prepared to feel alternating waves of anger and despair. It's so so bad, if modern TVs were websites they'd have flashing GIFs and a sign saying "Welcome to our homepage!" Actually, it's worse than that. It's like using a broken flash animation over a dial-up connection with the latency of relayed semaphore.
The fact that Apple _haven't_ yet launched a full TV makes me think they have completely lost the plot. Steve talked about it on many occasions, and he was absolutely spot-on (as usual) in his analysis of current products, so where the heck is it? The market is there, the disruption potential is unbelievably huge, the timing is perfect. Tim had it right when he predicted "apps" (interactive channels) would be the future of TV, but not in the ludicrous form of a mac mini intruding into my living room with cables hanging out the back of a TV, especially if it's wall-mounted. If there's one thing the consumer world does not need, it's more stupid third-party boxes plugged into the back of TVs.
Modern TV UIs are utter, utter, garbage. They're the dumb phones of the contemporary consumer electronics landscape. This is exactly the type of market Apple usually walk into and completely monopolise. How on earth have they not done this yet? Who doesn't want control of the biggest screens in the house? That are increasingly going to integrate with mobiles? That connect to Games Consoles, which you could... replace. I mean, for the love of god, the potential is ludicrous, what on earth is wrong with them?