The next Apple Watch may not need an iPhone (AAPL)

Global Wearable Shipments

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The next iteration of Apple’s smartwatch, set to be released later this year, will come with built-in LTE connectivity, reducing its dependence on the iPhone, according to Business Insider. The integration of cellular connectivity means Apple Watch owners can connect to the internet without needing to be tethered to their iPhones.

Smartwatches were once touted as the next generation of devices to replace the smartphone. However, demand began to cool as consumers grew impatient with the tech’s lack of capabilities and its dependence on smartphones. By giving the Apple Watch stand-alone capabilities, the company will likely see increased sales of the device.

As smartwatches gain new functionality and capabilities, like LTE compatibility, consumers and developers could find heightened value in the devices.

LTE-enabled Apple Watches could provide distinct use cases independent from the iPhone. A shortcoming of the Apple Watch is that it shares most of its functionality with the iPhone, which users already carry around in their pockets. Separating the two devices could, in effect, enhance the appeal of the Watch. About 38% of Apple Watch owners believe stand-alone connectivity would be a critical feature for the next iteration of the device, according to a survey run by Fluent.
Developers could be enticed to build more apps for the Apple Watch. An analysis of the Apple Watch found that fewer developers are building apps for the wearable device, largely due to the inability to generate revenue from the form factor. If LTE connectivity has the desired effect on the consumer base, developers could be incentivized to build more Watch apps to reach these users.

The Apple Watch is a part of the company’s efforts to build an ecosystem of iOS devices to keep users on the iOS platform. Creating a new smartwatch with stand-alone capabilities will help Apple in this endeavor.

Laurie Beaver, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartwatches that:

Forecasts smartwatch shipments through 2021 for both overall device shipments as well as by operating system.
Provides an overview of the main players in both hardware and software, and how they will size up in the future.
Demonstrates the effect of Apple’s entrance into the market, and why it's unlikely to dictate future growth.
Gives insight into what technologies need to be worked on in order to incentivize future growth, the effects they will have on the market, and how they can be used.
And much more.

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