How does the Apple Watch keep time?

Two Apple Watches placed side-by-side will be completely synchronized, with the second hands moving at exactly the same time. How does this work?

Apple has selected 15 Stratum-1 level Network Time Servers from around the world to source the current time. Each server location is connected to GPS satellites in orbit, which receive the time from an atomic clock at the US Naval Observatory.

Apple has included corrections for latency when acquiring time information and to compensate for delays when communicating with the iPhone.