The ninth seed from Germany won the first set comfortably 6-2, but the British No. 1 found her range in the second set and more than matched her opponent to take it 7-5.
However, Kerber fought back in the decider and took it 6-1, although the scoreline did not reflect Watson's fighting spirit, with her opponent later describing it as a tough match and the Sarnian as 'a talented player'.
Full report and reaction in tomorrow Guernsey Press.