Do App Groups still work on Watch OS 2 as a mechanism for sharing files between the watch and iPhone?
(Since WatchKit extension will now reside on the watch instead of the iPhone)
What changes to we need to make to the existing codebase?
See the documentation on Watch Connectivity framework. App Groups are no longer applicable.
"Watch apps that shared data with their iOS apps using a shared group container must be redesigned to handle data differently. In watchOS 2, each process must manage its own copy of any shared data in the local container directory. For data that is actually shared and updated by both apps, this requires using the Watch Connectivity framework to move that data between them."