Apple's promised hearbeat sensor is a good step towards making a more advanced fitness/health device, at least. Even though I'd rather have that as a thin Fitbit-style band rather than a chunky touchscreen watch.
It should be noted that the Samsung Gear Live (one of the first two Android Wear devices from last June), as well as the Moto 360 both have a heart sensor, powered by an LED on the back of the device, just as Apple's will.
Note that a number of available smartwatches already have heartbeat sensors (Gear 2, Moto 360, LG G Watch R, etc). You didn't exclude this possibility, but just wanted to clarify for any who wondered.
Yea, I think the Fitbit style is the design they should shoot for.
They could use the wrist band to hide precious IC space, along with the antenna for the GPS.