The port is currently being used to connect to the Watch for development purposes, but TechCrunch speculated it could be used to bring “smart straps” to the device in the future:

The reason I ask is that the Apple Watch has a port that the company has yet to show off. It’s being used for diagnostics and direct access to the Watch operating system, but it’s feasible that could be used to connect accessories in the future.

A similar platform was announced as part of the recently introduced Pebble Time smart watch to allow bands to interact with the watch’s OS and add additional sensors to the device.

The report from TechCrunch also notes that Apple snuck in its usual “Assembled in China – Designed by Apple in California” marking inside the other strap slot.