Problems

Technological Disruption: Magnetic Fields have the potential to negatively interact with susceptible technology.  More specifically, magnets have the capability to alter data stored in electronic devices such as cellphones, laptops, etc. (more of a risk with magnetic storage media, such as mechanical hard drives)

As our design contains magnetic materials, our Kinetic Compass is no exception. 

The electromagnets in our device shall not be harmful to nearby electronics.

The strength of the magnetic field produced by our product should be negligible, disallowing attraction of magnetic objects and interaction with other susceptible technology. 

Solution

We shall keep field redirection in as a design constraint: 

To minimize potentially disruptive magnetic output and while allowing readings of Earth's magnetic field.

Although magnetic fields typically cannot be stopped, some steel alloys can redirect them. Constructing the chassis of the watch with such a material could help to nullify the possibility of negative effects that the internal magnetic fields may have on other electronics.