I worry this will be a massive target for theft. If someone sees you wearing an Apple Watch they know you have at least a $350 watch and $400+ phone on your person.
Besides, how do people with expensive watches (Rolexes and whatnot) manage?
As it happens, this kind of wealth signaling is a legitimate personal safety risk in many countries today, esp lower- to middle-income ones. In those countries, very few people can afford to wear expensive watches; and when they do, they just don't wear them around everyday in every public setting --more like for special occasions, private parties, meetings, etc. Note the risk is not just 'merely' mugging: it can also be kidnapping (you or your loved ones), 'doxxing' you and your family and emptying your bank accounts and so forth, or even extreme forms of assault --beatings, rape or death. So it's kind of a big deal.
iPhones, on the other hand, can be carried and used discreetly at all times, in non-conspicuous cases and using hands-free earphones --that is, until now, if you happen to be wearing a beaming iWatch right on your wrist, thus defeating the whole point.
At least with the watches, if you wear long sleeved shirts, nobody will see it. Only while wearing tshirts it would be visible.
As far as mugging potential goes, I think nowadays you could attempt to mug any person on the street and chances are pretty high that they carry a smartphone which has at least a value of 350 dollars. Android or iOS. So, I don't really think that theft would be a bigger problem than it already is with smartphones.