Well, if I remember correctly...the iphone wasn't great at what it did when it was released the first time either.
I think Apple is entering the market with a good, albeit overpriced watch for what the technology can do now. However, what the technology can do now is pretty limited...and Apple limits it more, by making it trapped in the Apple infrastructure.
This seems like a companion product than a product that could survive on its own, and that is a problem in my eyes.