The first thing that people look at would likely be the watch body. Is it too bulky, does it look cool and fashionable? The ideal body should be suitable for both casual and formal wear. For example, the Pebble with its nice clean sporty look would blend well sports attire but might look a bit out of place when worn with a suit and tie.
Most guys do not mind larger watches, but some ladies do. Too much bulk to the watch makes it one chunky thing on the wrist that appeals to no one. The difference in watch size could mean that more goodies can be crammed into it.
The watch face, like the body, should be able to match different dressing needs as well. This is easier as the watch face can be changed with the press of a button. So this is something that the watchmakers or third party developers will need to take note of. While the watch body can have a general design that fits most dressing needs, the watch face should match a particular theme. A classy formal watch faces for more formal occasions to large sporty display for sporting needs; there should be enough watch faces to appeal to different users and their needs.
Last but not least, the watch strap. Just like the two other parts mentioned, the watch strap should be able to fit most dressing situations, and there are two possible ways to do this. The first way would be similar to the design fundamentals of the watch body such that the watch strap would look good whether it is worn with casual or more formal wear.
A second option would be for the strap to be easily replaceable. While the Pebble and Agent use standard 22mm watch straps that are easily changed with a small screwdriver, this might still be a bit too troublesome for some, especially if you change straps often or are in a rush.
Functionality and reliability
Firstly, what should the screen be? A touchscreen, standard LCD or e-ink display? Each option has its benefits and disadvantages and affects several key considerations of a smartwatch, like design, functionality and power consumption.
A small screen would also mean that you cannot display a lot of information.
Having said that, a touchscreen would add to the usability of the watch compared to pressing buttons to scroll and select. Besides, with touch screen smart phones being so ubiquitous now, this might be something that people expect. However, this increase in usability is balanced off by an increase in power consumption.
Notifications are a critical component of the smartwatch value proposition. For a start, they must be reliable and pushed to the user as required. If notifications are regularly missing, the user will not trust the watch and thus be required to continue checking their phones, defeating the purpose of the watch. Moreover, notifications must be informative and accessible.