Is it? I am wearing a watch, but I have no idea about the direction of the trend. Also, even if it does go down I'd expect it to go the way of the vinil. Would not be surpirsed if wearing watches will become fashionable again soon.
I've worn a wristwatch since elementary school, and I'm noticing fewer and fewer people wearing them. As a second anecdotal data point, it's getting a lot harder to find replacement batteries and bands when they wear out - it used to be you could find them in any department store or electronics store, now you pretty much need to go to a shop that specializes in watches. (For context, my watch is a utility more than a piece of jewellery, so I don't want to spend more than I spent on my $25 Timex on replacement parts.)
That said, while I've been watching the smartwatch scene with interest, I'm not particularly interested in buying one yet; maybe when the market matures to the point where I can get a decent one for under $100.