I think it’ll be good for Apple. Everyone will go “yay” and buy another brand of crap smart watch, realise it’s total garbage and buy an Apple watch anyway.
I'd love to use a Garmin or a Suunto, but they aren't integrated very well on iOS and I like the convenience of my iPhone and Macbook too much to switch to an Android. I think there are a lot of people who're not very satisfied with Apple Watches for sports tracking or who'd just like something that lasts a week at least. There are quality options outside of Apple Watches if you don't need it to feel like a tiny iPhone. Most of the UX I need was available on a Chinese smartwatch almost ten years ago (though super buggy back then), the basics aren't that hard and seeing how a fair lot of iOS apps have dropped their WatchOS apps for lack of usage I don't seem to be so singular in that.
But I don't think it'll hurt the Apple Watch sales all that much either, they still work very well as a fashionable accessory.
I have been using an Apple Watch since 2018 (bought for the "superior" swim tracking back then) and I think they are really not that good for sports tracking.
There is 3rd party software that makes the deal much better but it's ridiculous that they aren't able to provide the same quality/usefulness natively and it's added costs/frictions in the use experience.
I don't care much for the smartwatch thing (I think they are largely useless for the most part) and I believe this is exactly why Apple is trying very hard to not open up.
For smartwatch purposes, something as expensive (and with such a small life) as an Apple Watch doesn't make a lot of sense. You are spending way too much on some basic functionality and for sports tracking Apple really needs to step up to provide value matching the price.
The Apple Watch Ultra is decent but widely overpriced for what it does, even the most ardent Apple fans will say as much (like MKBHD who basically acknowledged that the Ultra primary feature was to be able to show that you had the most expensive watch from Apple).
I have both a Garmin (Instinct solar) and an Apple Watch (S10). The Apple Watch is actually slightly more useful even if it doesn't last more than a couple of days. Actually if I'm honest the Apple Watch saved my life a couple of times. The Garmin is nice, but it's just not as useful.
