guess you can argue analogue watches don't really exist
Sure, but only if you want to get all theoretical. Yes, quantum mechanics does state that all matter is discrete at the quantum level, and individual atoms are of course somewhat discrete entities, but that's a bit extreme. If you take that point of view, practially nothing is analogue -- at least, nothing tangible.
My father had a watch with hands that ran quite smoothly; they may not be as popular as the "retro" jerky-motion watches currently in fashion, but they certainly existed and continue to exist.