I agree the low to mid range watches will phase down, but I think the high end will actually expand. For a while the younger generation weren't wearing watches, but the Apple Watch (and others like) will get them use to wearing one. And as they grow older and mature, their taste will be more sophisticated and they would want to differentiate themselves from the rest of the pack. At that time they would want to treat themselves to a more desired, high-quality timepiece.
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I am just twenty something, but I appreciate the art of mechanical watches too. What I concern about is how well and essential the smart watch will be. I believe that smart watch may be a daily essential in the future; that's why I think that even the high-end watches will be impacted quite hugely.