The biggest limitation is the screen size. Watches could arguably be made to do everything we want, but we'd still need to plugin an external screen. I'd like to see someone give an futurama style armband a go.
With an armband you lose a hand for interaction. But I agree that screen size will forever be the watches' undoing. Where they will excel is any segment that has an item you have to mindlessly carry on your person all day: security badges, wallets, door keys, insurance trackers, health-device controls. Everything else will stay on phones or similarly-sized devices.
You could in theory just have a very thin remote display with the "brains" inside of the watch. In theory that display could be made much cheaper so you have no/less concerns about dropping/breaking/losing it. Pretty hard to misplace a watch that's always on your wrist.
> With an armband you lose a hand for interaction.
Absolutely true.
What you gain is (some are more or less debatable and/or situational):
1) Stability. The device cannot be knocked out of your hands or dropped, unlike 5" phone. I can give you two situations where this is very safe where a phone isn't: in a store, and on a bike.
2) 24/7 on you, with the advantages you mentioned.
3) Less chance of the device getting grabbed out of your hands. If the device looks like a normal watch (and not like an Apple Watch) the chance of getting robbed for your watch stays approx the same.
4) Information leaking. Phone has this too. Phone has larger screen, watch with t-shirt is 24/7 seen.
> With an armband you lose a hand for interaction.
I think the comparison being made was between armbands and smart watches, not armband phones vs. regular phones. I don't know about you, but I _certainly_ can't use both hands to interact with a watch on my wrist.
> he comparison being made was between armbands and smart watches
Well, we were talking about watches completely replacing the phone, then saying you need a bigger screen for that, so at that point I think it's legit to compare "a watch with phone-like screen" vs regular phone.