I've looked into this in the past (on an embedded device, not a smartwatch) and back then was convinced that it was a more difficult idea than I wanted to spend time on. Morse code is made for humans to write and humans to listen to, so it's often sloppy and difficult to parse in an automated fashion. Everyone writes a bit differently, at different speeds, and everyone has a different definition of how long a dash and a dot should be.

It's possible for sure, but like OCR there's a lot of variability in it. Just like parsing handwriting is full of edge cases, parsing morse code is as well.