Apple was recently granted a patent named "Watch with optical sensor for user input". In summary, a method to control your watch - the Apple Watch therefore - with gestures made by the hand or fingers, without physical contact with the device.
Optical sensor instead of the Digital Crown wheel
In practice, the Digital Crown wheel is replaced by an optical sensor, capable of understanding the movements of the hand to translate them into commands: click, scroll, etc. The disappearance of the Digital Crown would reduce the number of mechanical elements of the watch, i.e. increased waterproofness and solidity, and more space for other components, in particular biometric sensors or a larger battery.
The patent adds that other optical sensors could be used for biometric functions, such as measuring heart rate, respiration, blood oxygenation level, blood pressure and more. Source: Patently Apple