Apple's Watch is designed to be both fashionable and functional.
Best Buy iPhone Shortages and More iPhone Production Rumors
In addition to these reports, Digitimes reported last week that 5 Taiwan-based circuit board manufacturers had already started shipping parts for the new iPhone which is expected in June. Taken together, there seems to be increasing evidence that a new iPhone will be revised at or around WWDC. Over the weekend, even some possible screen photos of the new iPhone were revealed from a Hong Kong based site but were quickly removed.
Meanwhile, analysts are still speculating about what processor might drive the new iPhone. Most expect that Apple will still be using off-the-shelf parts as they are unlikely to have yet had the time to ramp up their own custom chip production. For what it's worth, MacRumors has heard that Apple will indeed be using the ARM Cortex for the next iPhone. This is the same class of processor used in the upcoming Palm Pre.