While the Apple Watch 3 has previously been reported to feature LTE connectivity, the smartwatch is likely not to feature support for direct phone calls, according to often-correct KGI Securities analyst Ming-Chi Kuo.
Instead, Apple's next-generation smartwatch will use LTE for data connectivity independent of the iPhone. Kuo told investors Apple is likely to rely on VOIP services on the third-generation Apple Watch, allowing it to focus on data transfer and simplify working with mobile carriers. Kuo wrote (via MacRumors):
This has two benefits: (1) negotiations with mobile operators will be more simple and the chances of cooperation with mobile operators will improve; and (2) 3G connectivity can be scrapped, simplifying the antenna design and facilitating internal design. However, we think there is a chance that users may use LTE Apple Watch to access VoIP services, such as FaceTime and Skype.
The second-generation Apple Watch currently available to customers uses Wi-Fi connectivity and iPhone pairing to connect to the internet. When outside of Wi-Fi range and an accompanying iPhone, the Apple Watch Series 2 is unable to use apps that require data connectivity, like FaceTime.
Kuo has previously reported Apple will offer both a non-LTE and LTE version of the Apple Watch 3. To save space, the LTE version is likely to use an eSIM instead of a physical SIM slot, and work across the major carriers in the US, including AT&T, Verizon, and T-Mobile, Kuo said.
Contrary to previous reports, Kuo said the Apple Watch 3 won't have an obvious change to its form factor. It also won't support 3G connectivity.
In a separate report on Thursday, Economic Daily said Taiwanese-based Quanta Computer has entered the final testing phase for the third-generation Apple Watch and is close to beginning mass production for a launch in the fourth quarter of 2017.
Bloomberg previously reported Apple intends to introduce the cellular capable watch alongside the three new iPhones this fall. Apple could unveil the Apple Watch Series 3 at its rumored iPhone event in September and then launch the smartwatch later in the year alongside the HomePod speaker and 4K Apple TV.
It's worth taking a healthy dose of salt with rumors, because, of course, company plans change. Nothing is for sure until Apple CEO Tim Cook steps on stage to make things official.