We propose a categorization of smartwatch use in the health care sector into 3 key functional domains: monitoring, nudging, and predicting. Monitoring involves using smartwatches within medical treatments to track health data, nudging pertains to individual use for health purposes outside a particular medical setting, and predicting involves using aggregated user data to train machine learning algorithms to predict health outcomes. Each domain offers unique contributions to health care, yet there is a lack of nuanced discussion in existing research. This paper not only provides an overview of recent technological advancements in consumer smartwatches but also explores the 3 domains in detail, culminating in a comprehensive summary that anticipates the future value and impact of smartwatches in health care. By dissecting the interconnected challenges and potentials, this paper aims to enhance the understanding and effective deployment of smartwatches in value-based health care.