With a cellular connection, the new Apple Watch models will be untethered from the iPhone, able to stream music, send messages, download apps, and connect to the internet without the need for an iPhone.
It's not clear if a standalone cellular plan will be needed for the Apple Watch, but it seems likely. According to Bloomberg, only a subset of carriers who sell the iPhone will support the Apple Watch, but in the U.S., AT&T, Verizon, and T-Mobile all plan to offer the LTE Apple Watch when it launches.
Intel, not Qualcomm, will supply the LTE modems for the Apple Watch.
Cellular connectivity for the Apple Watch is not a new rumor - we've been hearing hints of it since before the Series 2 Apple Watch was released last September. Battery issues have reportedly been holding Apple back - a cellular connection drains battery more quickly.
Previous third-generation Apple Watch rumors have suggested Apple is focusing primarily on improving battery life and the company may have made enough progress to compensate for LTE connectivity.
Aside from the inclusion of an LTE chip, not much is known about the next Apple Watch. Rumors have pointed towards a more minor update that focuses on under-the-hood hardware and performance improvements rather than external design changes.
Bloomberg believes the cellular-capable Apple Watch will launch this fall alongside new iPhones, but cautions that the device could be delayed beyond 2017.
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