I thought it's discussion between people with engineering background.
Think how watch communicates with a smartphone. It cannot use cell protocol as it doesn't have built it radio tranmitter, not big enough battery , nor network address (a.k.a. cellphone number) . So it uses some small short distance protocol like bluetooth - 20 feet or even less. One of it's main specs is long battery life and as a result you would be limited to the distance over which it can communicate. And it is expected to be within 5 feet of smartphone anyway. There will be no use for "find my smartwatch" app .
>> If the watch had smart capabilities, it can send message to his smartphone that I am lost, come get me from this location.
Good luck with that. The first operation will be to disconnect that watch wth the phone in case it is stolen. But losing watch is not that common. Until they make these watches full phone I do not just see the value.
The key is to innovate and keep the community busy. Value is not the key word here. I see Google playing more offense than defence. Do things to engage the community. Buy companies to avoid competitors reaching them. Etc
My husband just lost his watch and he doesnt know where he kept. I suspect it was in the Gym. If the watch had smart capabilities, it can send message to his smartphone that I am lost, come get me from this location.