Apple is reportedly prepping an LTE version of its smartwatch—a move that will divorce the wrist-worn gadget from a user’s iPhone and offer mobile carriers a brand-new revenue stream.
As it stands, the Apple Watch acts as an extension to the iPhone, incapable of fetching new information without the user’s phone in range. It simply connects to the main handset via Bluetooth, and ports content from maps and iTunes, republishes iPhone texts and app notifications, and issues calendar alerts, among other things. Some versions do have GPS for run-tracking and the like, but that’s as far as it goes.
Now, reports have surfaced that a new, cellular-enabled version of the wearable will hit the market by the end of the year. With LTE on board, users will be able to leave their iPhones at home when taking a run, or can leave them charging while in meetings at work, and still get their communications alerts and stream music. The launch will be a timely follow-on for the already-announced debut of WatchOS 4, which Apple said will have more Siri voice-enabled features, plus the ability to connect to gym equipment, send payments in iMessage and display news stories. The potential for a rash of cool new connected apps is palpable.
For all the benefits to consumers, the positives for carriers could be extensive as well.
Bloomberg cited unnamed sources in reporting that Apple is already in talks with carriers in the U.S. and Europe about distribution for the device, which will rely on Intel chips. The Big Four—AT&T, Verizon Wireless, Sprint and T-Mobile USA—have all said yes to adding the device into their portfolios, sources said.
If an LTE Apple Watch makes it to market, volumes could be significant: During Apple’s earnings call last week, CEO Tim Cook said that sales of the watch even without LTE were up more than 50% in the fiscal third quarter, though he didn’t break out hard numbers. As a standalone device, its appeal would be greatly widened, according to analysts.
“It would be a game changer,” Gene Munster, co-founder of Loup Ventures, told Bloomberg. “If they could deliver an experience that isn’t tethered to an iPhone, it could kick-start a new direction for the business.”
Sprint has carried noncellular Apple Watches in the past, and recently put them on clearance. But an LTE-ready device would be a different animal. Carriers already have ancillary portfolios of cellular smartwatches for Android, which don’t seem to be going anywhere; adding Apple Watch to the mix would undeniably widen their target market.
As for pricing, we can only speculate from the existing market. Verizon, for instance, offers LTE-enabled Android-compatible smartwatches with required contracts from Samsung and Fitbit ($200 and $150, respectively), as well as its own branded Verizon Wear24 watch ($300), hybrids from Fossil and Garmin ($150 and $175, respectively) and lower-end LG Gizmos (under $100 each).
AT&T has a similar portfolio but, notably, offers the top-tier Android-ready LG Watch Sport for $350. Sprint and T-Mobile have their own comparable offers as well. An LTE Apple Watch will almost certainly fall towards the top end of the going range, and in some cases may set the upper limit.
So, consumers will have a choice—much as they do with iPads—to pay more upfront for a watch that has no LTE, or pay a smaller device cost along with committing to a two-year contract for one that does.
Apple, Intel and the carriers have yet to comment on the reports.