One of the features brought up again and again on Apple Watch marketing material is its accurate time keeping. Apple says that the time on the Apple Watch is accurate to 50ms of the global time standard.
The time on each watch is so accurate that if you were to place two Apple Watches side by side, the second hands on each would be perfectly in sync. This is achieved in part due to 15 network time servers maintained by Apple across the world. The iPhone updates its time from the closest network time server and then updates the Watch over Bluetooth.
Apple also goes as far to make corrections to that time on the Watch to correct for delays in Bluetooth synchronization. These corrections are done in software to ensure that any additional lag between the phone and watch is accounted for.
In addition, there is a crystal oscillator that is temperature controlled within the watch to prevent time drift. Any time keeping device has to contend with time drift over a longer term period. In the event that the Apple Watch is not connected to an iPhone for one or more time synchronizations, it can still maintain time accuracy.
This is clearly one of the advantages of a smartwatch over traditional mechanical watches. It is also not surprising that Apple emphasize this so much in its marketing. Traditional watch makers will need to either make smartwatches or hybrid watches in order to make sure their timepieces are as accurate over the longer term.