Apple Inc. is planning to release an updated smartwatch later this year that can connect directly to cellular networks, a redesign aimed at reducing the device’s reliance on the company’s own iPhone, Bloomberg reported, citing people familiar with the effort.
Currently, Apple AAPL, +0.53% requires its smartwatch to be connected wirelessly to an iPhone to stream music, send messages and perform other functions. But with the change, at least some new Apple Watch models will be equipped with LTE chips that replace the iPhone dependency.
Intel Corp. INTC, -0.52% will supply the LTE modems for the new Watch, Bloomberg said, again citing unnamed sources believed to be familiar with the change.
If confirmed, that’s good news for the chipmaker, which has ramped up efforts to get its components into more Apple devices. Apple already added Intel as a modem supplier for some iPhones last year. Expanding Apple Watch business with Intel is potentially bad news for its modem rival, Qualcomm Inc. QCOM, -0.62% , which has been the main supplier for iPhones and other Apple gadgets.
Wireless carriers supporting the LTE Apple Watch, at least at launch, may be a limited subset that offers the iPhone, Bloomberg reported. AT&T Inc. T, +0.39% , Verizon Communications Inc. VZ, +0.62% , Sprint Corp. S, +1.87% and T-Mobile US Inc. TMUS, +1.24% plan to sell the updated device in the U.S., Bloomberg said.
Apple, in its quarterly earnings report out August 1, beat conservative expectations for iPhone sales. The bar was lowered after CEO Tim Cook in May conceded there’d been a “pause” in iPhone sales amid heavy promotion for a 10th-anniversary model scheduled for September. The earnings report overall was soothing enough to send shares to record highs this week, striking an intraday high of $159.75 the day after the earnings release and closing at an all-time best $157.14 that day.
Analysts said guidance within the earnings release boosted market expectations that new iPhone hardware would emerge in September. That followed recent reports that a high-end iPhone rumored for release this year had hit production problems that would keep it from reaching prospective buyers before Apple’s fiscal year wraps at the end of September.
AAPL closed Friday at $156.39. The stock is up some 35% so far in 2017, more than tripling the year-to-date performances of the broad-based S&P 500 SPX, +0.19% and the Dow Jones Industrial Average DJIA, +0.30% which counts Apple as a component.
INTC slipped 0.5% to $36.30 Friday. It’s trading just in positive territory so far for 2017.
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