Its literally so simple to fix this problem. The watch needs to be self sufficient.
Apple Watch already has GPS. Perfect it by adding 3G/Wifi functionality. A standalone system will bring back the watch market.
It's need to be self sufficient to sell more too. Watches are jewelry, so you want more than one. Right now it's painful to have more than one wearable. They could boost sales with a smaller market by just letting the niche be able to do multiple devices.