This is cool as a product extension, but also as a innovative business model. Apple's Nano music player is creatively integrated into to a wrist band thus extending its use as a multi-touch watch.
The Chicago based product design firm MINIMAL has developed a plan for financing the production of this idea to the public. So if you wanted to be a venture capitalist here is an opportunity to seeded a new idea.
NYTIMES Article: An iPod Watch Project Explodes Online