The senile artificial intelligence Holly is able to be stored on a form of wrist-watch, although he has become wary of people who scratch their armpits or who have holes in their pockets. Holly can been transferred back and forth from the mainframe of Red Dwarf.
Lister's Holly Watch was first seen in Series II, whenever the crew were away from their own ship or time (i.e. Stasis Leak, Parallel Universe) so that Holly could continue to communicate with the crew.
Holly could also go mobile in the form if the Holly Robot.
After the ship was transformed into a planetoid, the Boys from the Dwarf found the watch on the planet's surface, proving that it was indeed their mothership. After the nanobots rebuilt Red Dwarf, a rebuilt Holly ran the ship, the other (newly resurrected) crewmembers threw the regular characters in the Tank. However the old Holly was still stored in the wristwatch, unknown to the guards, and throughout Series VIII he would come up with ludicrous plans to help the Dwarfers escape the Tank.
Holly or the watch is not seen again after Series VIII (possibly because the watch was destroyed by the Chameleonic Microbe, left in the Mirror Universe, or taken by Kochanski when she fled Red Dwarf during the 1999 - 2009 bridge).