The purpose of a watch is pretty much just to look nice these days (exceptions being sport watches etc). As you say, phones have the same functionality (time, stopwatch, calendar, alarms... they are even waterproof these days), so there is very little benefit to owning a watch other than for fashion.
I could see the point of it if you didn't want a phone or anything else in your pockets messing up the lines of your suit, but I bet everybody still has their phone with them.
I reckon you could sell watches that didn't even work as long as they looked nice... I'm not having a go, I can see the appeal, but honestly, do people who wear watches ever actually use them to tell the time?
If I did have a nice watch I'd spend the entire time forgetting to take it off and damaging it, or forgetting to put it back on.