All Apple Watch models have been confirmed to have 8GB of internal storage, but only 2GB will be available. That said, it's a watch and tells the time!
The 2GB limitation (2GB for music and just 75MB for photos) is actually generous for a smartwatch. Most consumers store countless GBs worth of music on their iPhones and the new smart wearable is a perfect companion device to control said collections. This would help negate the need to waste iPhone battery through wakening the screen and unlocking the display to access playback controls.
All three smartwatches from Apple, the Sport, Watch and Edition, will feature the same capacity. This extra storage enables iPhone owners to store some media on the Apple Watch so they aren't required to be lumbered with a larger device, ideal for when out for a jog and such.
The remaining storage will be saved for the operating system and any apps you download and install. We'll be able to find out more about storage on the Apple Watch when the smartwatches are released in April.