I feel most buyers of basic digital watches in the near future will still prefer the black and white style screen found in most digital clocks and calculators because black and white screens on watches are more affordable, don't need a backlit to read in sunlight or under bright lights and more durable where they may last many years of constant use like calculator screens which can last many years.
People, who want a watch with a color screen, will buy a smartwatch like the Apple Watch which has a color screen, and other more advance features.
I guess, if they wanted a colour screen, like you said they would move on and get a smartwatch. I don't really see the appeal of digital watches anymore (except for the price) when you could get a smartwatch.
Well, of course!
Even I would like my watch to be more sophisticated with cool features. Just alarm, light, stop watch....ugh....they are just normal and the dial isn't special enough.