Apple warranties its Apple Watch for 12 months at no additional charge, though owners of the first generation (Series 1) wearable are getting two extra years of coverage to protect against swollen batteries, an issue that's been raised on multiple online forums. The extended warranty is specific to the battery and does not appear to cover other potential problems that might arise.
It does not appear that Apple is notifying registered Apple Watch owners directly about the extended warranty coverage, and is instead making sure that its employees are up to date on the new policy.
"Apple has extended service coverage for eligible Apple Watch (1st gen) models with an expanded/swollen battery to three years after the original date of purchase. Eligible devices will be covered for two years beyond the original 1-year limited warranty," Apple states in an internal memo.
Source: Apple's Support Forum (w83design)
The issue has been documented by users on Apple's support forums. Those experiencing the problem note that the swollen battery pushes the display up. The same discussion can also be found on Reddit, with one user noting he woke up to a pop sound coming from his nightstand. When he picked up his Apple Watch, he said it felt noticeably hotter than usual, though not enough to cause a burn.
Batteries in mobile products have been under additional scrutiny ever since Samsung had to recall its Galaxy Note 7 line due to exploding handsets. Samsung now has a new program in place that more rigorously tests for and certifies batteries to prevent future issues, but there is still the concern that burning incidents could happen with any mobile product with a lithium ion battery back inside.
In this case, a Reddit user who claims to be an "Apple technician specialist" says that Apple Watch "batteries are carefully designed not to rupture in even of expansion failure" and that it would take the "wrong impact damage to the display enclosure to puncture that thing and spew hot battery goo on anybody." Sounds comforting, doesn't it?
In any event, if you own a first generation Apple Watch and notice it bulging, get in touch with Apple about having it replace or repaired.