digital display simply shows the time as a number, e.g., 12:08 instead of a short hand pointing towards the number 12 and a long hand 8/60 of the way round the dial.
The first digital mechanical pocket watches appeared in late 19th century. In the 1920s the first digital mechanical wristwatches appeared.
The first digital electronic watch, a Pulsar LED was invented by Peter Dimitroff Petroff who was a NASA engineer. Petroff was originally from Bulgaria and in 1968 started Care Electrics developing wireless heart monitors for hospital use. Care Electrics evolved into Electro/Data which created the prototype digital watch. The watch was marketed by the Hamilton Watch Company as the Pulsar which sold for $2100.00 in 1971. It had a red light-emitting diode (LED) display. Promotional Digital Watches are popular as "geek watches" since they incorporate a large number of features other than displaying the time.
Digital LED watches were very expensive and out of reach to the common consumer until 1975, when Texas Instruments started to mass produce LED watches inside a plastic case. These watches, which first retailed for only $20, reduced to $10 in 1976, saw Pulsar lose $6 million and the Pulsar brand sold to Seiko.
Most watches with LED displays required that the user press a button to see the time displayed for a few seconds, because LEDs used so much power that they could not be kept operating continuously. Usually the LED display color would be red. Watches with LED displays were popular for a few years, but soon the LED displays were superseded by liquid crystal displays (LCDs), which used less battery power and were much more convenient in use, with the display always visible and no need to push a button before seeing the time. The first LCD watch with a six-digit LCD was the 1973 Seiko 06LC, although various forms of early LCD watches with a four-digit display were marketed as early as 1972 including the 1972 Gruen Teletime LCD Watch, and the Cox Electronic Systems Quarza.
From the 1980s onward, digital watch technology vastly improved. In 1982 Seiko produced a watch with a small television screen built in, and Casio produced a digital watch with a thermometer as well as another that could translate 1,500 Japanese words into English. In 1985, Casio produced the CFX-400 scientific calculator watch. In 1987 Casio produced a watch that could dial your telephone number and Citizen revealed one that would react to your voice. In 1995 Timex released a watch which allowed the wearer to download and store data from a computer to his wrist. Some watches, such as the Timex Datalink USB, feature dot matrix displays. Since their apex during the late 1980s to mid 1990s high technology fad, digital watches have mostly devolved into a simpler, less expensive basic time piece with little variety between models.
Despite these many advances, almost all watches with digital displays are used as timekeeping watches. Expensive watches for collectors rarely have digital displays since there is little demand for them. Less craftsmanship is required to make a digital watch face and most collectors find that analog dials (especially with complications) vary in quality more than digital dials due to the details and finishing of the parts that make up the dial (thus making the differences between a cheap and expensive watch more evident).