Insightful post by Horace Dediu (he runs and writes Asymco, and also works at the Clayton Christensen Institute), titled “The Battle for The Wrist”. Below are key excerpts (bold emphasis is mine).

The Apple Watch offers a hierarchy of surfaces onto which software can compete for attention:

1. The Complication Layer
2. The Notification Layer
3. The Glances Layer
4. The App Screen

These surfaces are arranged in a hierarchy where the highest is the most accessible and the lowest is the least accessible. […]

It follows then that software which is located at the top of each hierarchy on each device will have the greatest exposure to user interaction and that the device which has the nearest proximity to the user will provide the greatest value to software developers.

This implies further that the most valuable “real estate” for software will be the Complication layer on the Watch. […]

You’ll note that the winners on the phone were different than the winners on the PC. My bet is that the winners on the Watch will be different than the winners on the Phone.

I would put the Watch Face at the top of this list. I’m guessing Horace didn’t mention it because it’s off limits to developers today. If you’ll bear with me, let me explain what seems obvious: Why the face is the most important layer.

First, consider that, once it meets our fashion requirements, a watch is a tool more than it is anything else. That’s because a watch is ill-suited for the other class of jobs a device can do — entertainment (audio aside). Unlike devices that enable both hands to be used (phones, tablets), the watch’s wrist-placement adds friction to most entertainment use cases. For instance, you have to try especially hard to keep it facing you.

On a device that’s a tool, the layer that has the most utility is king. That’s the watch face.

If one accepts that the watch is primarily a tool, it makes sense that the most valuable layer is the one that best embodies low-friction utility: the face. The face is low-friction because it’s the default view. The utility of the face comes from the fact that it displays a set of multiple, varied, structured, data elements. Some elements display the past (elapsed time), others anticipate the future (e.g., next meeting). So, the face is a set of information available in a moment’s notice. In a digital age sense, the face is a tool. No other information layer (complication, notification, glance element, or app screen) has the same default-ness and information density. On a device that’s a tool, the layer that has the most utility is king. That’s the watch face.

(Now, if you don’t consider the face, because it’s off limits to developers, then you’d have to consider the most-face-like contenders: an app that you might continously keep open on your watch, or a Complication.)

With this frame of reference, any hardware, OS, and application attributes that support this utility are especially valuable. Some examples:

Today, both Android Wear and Apple watchOS have some, but not all, of these capabilities. Apple Watch, for instance, has a good selection of watch faces and complications. But it lacks custom faces and an always-on ambient mode — two high strengths of Android Wear. Android Wear also allows for independence from the phone.

The odds that Apple would deny developers access to the watch face are low.

Seeing so much value in the watch face (rather than a notification, a glance, or an app) brings me to two final predictions.

A. Whatever the #1 element is (watch face, in my estimate), the odds that Apple would *deny* developers access to it are low. Apple knows, I’m sure, that (developers) x (the most powerful information layer) = (tremendous number of high-value apps). Or if it doesn’t, examples from Android Wear will soon make that clear. I would be surprised if Apple didn’t allow 3rd party watch faces in the next two years.

B. With regard to Horace’s point about “winners” (apps) on the phone vs. the watch: While many games are “winners” on the phone, the list of winners on the watch will have a lower proportion of games and a higher proportion of tools / utility apps. The watch’s position on the wrist, and the limited way of interacting with it, lowers the odds that games will thrive in the same way they do on the phone. That’s not to say there won’t be some break-out successes, but on average, the watch appears better-suited to providing utility, rather than enabling games.

The list of [app] winners on the watch will have […] a higher proportion of tool / utility apps.

It’s exciting to witness what Apple and Android developers are going to create and invent to move this mobile device forward.