Among other things, Google Now can be configured to give you a heads-up when it thinks you should leave for an appointment, based on your current location, the location of the appointment, and even real-time traffic conditions. Google is also working on giving it the capability to learn from your habits and adjust its notifications and estimates accordingly. The idea is that it can do a lot of this on its own, without you having to fumble with buttons or a touchscreen keypad. Meanwhile, the compact "cards" that the company has been developing for Google Glass could also come in handy on a watch's small screen. And, as you've probably noticed, Google search itself has become more oriented to delivering simple, straightforward answers to your queries, which is far more useful than a list of Web results when your screen is only an inch or two wide.
While other companies race to beat Apple to market with smartwatches, the assumption has been that Apple will set the bar if and when it comes out with an iWatch. But it had better watch out: Google could set a pretty high bar of its own, and it's looking like it might just do it first.