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Apple Inc. Watch Series 3 Could Cut the Cord

Apple Watch Series 3 - Apple Inc. Watch Series 3 Could Cut the Cord

Source: Apple

Most of the new product excitement around Apple Inc. (NASDAQ:AAPL) for 2017 is centered around the iPhone 8. With 2017 being the 10th anniversary of Apple’s most critical product, that’s understandable. But don’t forget the Apple Watch, which is expected to have an update in 2017, too — possibly with a big upgrade.

Apple Inc. Watch Series 3 Could Cut the Cord

Source: Apple

After meeting with Apple suppliers in Asia, a semiconductor analyst is now saying the Apple Watch Series 3 will support LTE, making it completely independent of an iPhone connection, even for making voice calls.

Analyst Thinks AAPL is Preparing a Cellular Apple Watch

9To5Mac is reporting that Susquehanna Financial Group analyst Christopher Rolland recently toured Asia, meeting with many of Apple’s suppliers. Included in that group of companies were wireless communication giants Broadcom Ltd (NASDAQ:AVGO) and Qualcomm, Inc. (NASDAQ:QCOM).

Based on the information uncovered during that trip, Rolland feels that AAPL is preparing a cellular Apple Watch and that the Apple Watch Series 3 will feature LTE connectivity:

“We understand a model of the next Apple watch will include a SIM card, and therefore is likely to support LTE. We understand some issues remain, including battery life and form factor size, but significant progress has been made. Apple may be employing VOIP and data across a CAT-M1 connection for superior battery life. Apple will tout interoperability with the company’s AirPods.”

Why the Apple Watch Series 3 Would Benefit From LTE

Apple has been working on a solution for cellular connectivity for some time, and was reportedly hoping to offer it as an option with 2016’s Apple Watch Series 2. Battery life concerns appear to have held it back then, but Rolland thinks AAPL has a solution that might work.

Not everyone understands why the company seems so intent on adding LTE to a new Apple Watch in the first place. The answer to that question is independence from the iPhone.

One of the cool features of the Apple Watch from day one was its ability to make and receive cellular phone calls — so long as it was within Bluetooth range of a paired iPhone. There are also many apps running on the Apple Watch that rely on a connection to an iPhone for data.

Adding integrated GPS in 2016’s Apple Watch Series 2 was a big step. It supported fitness enthusiasts in particular, letting them track running distances accurately while leaving the iPhone at home. But an Apple Watch Series 3 with LTE could make that experience significantly better. Apple Watch wearers could take phone calls, send messages, check their Twitter feed, receive notifications and potentially even stream Apple Music.

As pointed out by Rolland, a cellular Apple Watch is also a great selling tool for Apple’s AirPod earbuds — whether that’s to make voice calls easier, or to listen to music streaming from the smartwatch.

LTE Is Showing Up in Competing Smartwatches

An Apple Watch Series 3 with the option of LTE connectivity would appeal to many of AAPL’s customers. Especially fitness enthusiasts, who would rather not have to carry a relatively bulky iPhone everywhere.

But offering a cellular Apple Watch option would also help AAPL to remain competitive. Many of its smartwatch rivals have begun to offer LTE as an option. Samsung Electronics Co Ltd (OTCMKTS:SSNLF) sells an LTE-equipped Gear 3 smartwatch, for example, while LG offers the Watch Urbane 2nd Edition Verizon, with cellular connectivity.

How Likely Is an Apple Watch Series 3 With LTE?

This is a bit of a loaded question. There is little doubt that AAPL is aggressively pursuing a cellular Apple Watch option, and after being forced to skip the previous generation, the push is going to be on to get LTE as an option in the Apple Watch Series 3.

The first-generation Apple smartwatch was released in April 2015, the second in September 2016. There’s an expectation that a new Apple Watch will make an appearance in fall 2017, but that’s not a certainty. If AAPL can’t get battery life addressed to its satisfaction, rather than skip yet another generation for LTE connectivity, the company may instead delay the Apple Watch Series 3 to early 2018, using the April launch date of the original as precedent.

So the real question probably isn’t how likely an LTE option for the Apple Watch Series 3 is. Instead, we should be asking how likely it is that we’ll be seeing a new Apple Watch in September, versus next April.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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