Apple Unveils Watch With Cellular Capabilities

Apple Inc. on Tuesday unveiled a new smartwatch capable of connecting to cellular networks for calls, messages and streaming music, marking the first step toward liberating the Apple Watch and users from dependency on the iPhone.

The Apple Watch Series 3 will have an LTE chip that enables it to connect to the fastest cellular networks for many of the same functions the iPhone offers. Its predecessor, the Apple Watch Series 2, acted more like a remote control for the iPhone, using Bluetooth and Wi-Fi to fetch email, messages and other data from the handset.

The Apple Watch will feature new chips and new antenna. Chief Operating Officer Jeff Williams said it is the same size as its predecessor. He demonstrated the device on stage by using it to call his daughter, who was paddleboarding on Lake Tahoe and also talking with an Apple Watch Series 3.

The new Watch costs $399 with cellular capability, or $329 without. It looks similar to its predecessor, except for a red accent on a knob on the right side of the device. The Apple Watch Series 2 will be reduced in price to $249.

AT&T, Sprint, T-Mobile and Verizon will offer cellular in the U.S., with availability beginning Sept. 22

The new Apple Watch opened the company's annual product showcase, held for the first time at Steve Jobs Theater on the new $5 billion campus. The highly-anticipated event is expected to be punctuated by the release of a new, pricier iPhone with advanced features including facial recognition, which software leaks indicate will be called the iPhone X.

Investors, betting the new phone will rejuvenate Apple's sales after a recent slump, have pushed Apple's share price to record highs in recent months. The company announced a new Apple TV with 4K capabilities that can stream ultra-high definition video to compatible televisions with more than 8 million pixels per frame -- significantly sharper than traditional high-definition video.

Apple has sold an estimated 30 million Apple Watches since introducing the device in 2015, according to market research by IDC. The addition of Global Positioning System (GPS) and waterproof capabilities introduced with last year's Apple Watch Series 2 has the company on track to boost sales nearly 25% this year.

Investors have been tracking the Apple Watch's evolution closely as it has the potential to diversify Apple's revenue, two-thirds of which comes from iPhone sales. To date, Apple hasn't disclosed sales of the Watch, which was its first all-new product released under Chief Executive Tim Cook, and some detractors have said sales were stymied because the initial version lacked purpose.

Last year, Apple shifted its focus around the Watch to emphasize its ability to track runs, walks, swims and other fitness activities. The marketing around the first iteration of the Watch had focused on the device as a fashion accessory.

The Apple Watch Series 3 has the potential to extend recent sales gains by boosting the device's functionality, analysts said. The cellular capabilities allow people to leave their iPhones behind and still send and receive emails and messages by using Siri's transcription abilities. Users with AirPods wireless headphones could also make and receive calls using just the watch.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

September 12, 2017 14:10 ET (18:10 GMT)