Apple's Watch is designed to be both fashionable and functional.
iPhone 6 'Phosphorus' Component Likely a Barometric Pressure Sensor, Not Next-Generation M7
But according to MacRumors forum poster leecbaker, who is clearly familiar with these types of components, the item depicted in the schematic is not a next-generation M7 and actually appears to be a barometric pressure sensor. The iPhone 6 has been rumored to include a number of new environmental sensors such as an atmospheric pressure sensor.
The chip pictured has the part number BMP282. I'm 99.99% sure this is a Bosch barometric pressure sensor, similar to this part BMP280. Variants of one part often have slightly different part numbers- if Apple got Bosch to customize the chip for them with different packaging, or a slightly different measurement range, that would explain the difference in part number.
leecbaker goes on to highlight a number of applications for that Bosch pressure sensor, including GPS and indoor/outdoor navigation enhancement, weather forecasting, altimetry, and spirometry, the lung function measurements that were added to Apple's Health app in a recent iOS 8 beta.
Another MacRumors poster, kdarling, corroborates leecbaker's conclusions, noting that the pins on the Bosch sensor match those outlined in the schematic. He also notes that the BMP series is limited to pressure sensing and does not include the humidity and temperature sensing capabilities found in Bosch's BME series of sensors.
Assuming this new information is correct, and it certainly appears to make sense, this marks the second time a component leaked by GeekBar has been incorrectly identified. The poster had previously claimed a schematic showed the iPhone 6 carrying the same 1 GB RAM found in previous A-series chips, but that was quickly revealed to be a reference to an aspect of flash storage rather than RAM.