The "cheap" version will probably be more rugged than the others. Water resistance at least. It won't have a Sapphire lens.
Seiko, a watch company that runs the entire range of prices from around $100-$5000+, uses a material called Hardlux for their dive watches. It's not as scratch resistant as Sapphire but much harder to shatter.
They also make a line of watches in the dive "style" that is much more refined. Those are Sapphire and handmade. And really expensive.
For Apple, I think they will want to cover a wide range of prices and the only way for them to do that is to have a price structure similar to what Gruber suggested. It'd be a bitter pill to swallow for people like me who'd like a nice watch but aren't willing to drop a grand on one. Not on a watch that will be obsolete in 2-3 years. It'll be a tough sell.
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