2007 wasn't the introduction of the iPhone. It was the introduction of iOS. Apple didn't so much re-invent the phone as they did the idea of computing That's why the iPod touch was "just" an iPhone without a phone, and the iPad was "just" a big iPhone, and the Apple TV "just" iPad guts in a box. The instances can and will change and multiply, but for the foreseeable future, it will be iOS that drives them.
Enter the "iWatch". While iMore and others have heard Apple is going ahead with their wearable iOS device project, the crux here is that they're also continuing to push the future of mobile. Of what's next. Trying to predict what or how exactly that will manifest is difficult, just like trying to predict the iPhone before January 2007. You get iPods with click-wheel dialers. The iWatch could be to existing watches what the iPhone was to existing phones, and the iPad was to existing tablets. Just like Steve Jobs took the stage and made the case as to why the iPhone was better, and where the iPad fit, Tim Cook or Phil Schiller will prove the iWatch deserves a place in our lives.
Or, instead of a product, the iWatch could be an extension. Instead of an iPhone or iPad, it could be an Apple TV. It could be a hobby meant to expand the overall value of the Apple ecosystem, rather than a new business meant to further expand Apple's mainstream market.
Given Apple's recent work on Siri, Notification Center, Passbook, and other secondary interfaces to Springboard, and telephony like iMessage and FaceTime, it's easy to see why projecting those things from iPhone or iPad to iWatch is so tempting, as is the idea of Apple continuing the fitness-related partnership they began with Nike.
Mostly, however, an iWatch might just be a glimpse at what's next for iOS. There are very few phones in sci-fi, after all, and Apple's just exactly the kind of company that likes the will the future into the present.
To round out the discussion and get some idea of what the current expectations are, to delve into more diverse flights of fancy, I asked the iMore and Mobile Nations community just what exactly they want in an iWatch.