2 Rumored Apple Watch Updates Are Missing 1 Important Feature

By Markets Fool.com


Image source: Apple.

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The rumor mills never slow when it comes to Apple's (NASDAQ: AAPL) products, but they do tend to ramp up as September approaches. That's the time when Apple typically updates its mobile devices, and when it's expected to release new versions of its Apple Watch as well.

Yes, I said versions, within an "s". According to a new investor note sent out by KGI Securities analyst Ming-chi Kuo, Apple will unveil two new versions of its Apple Watch this year.

Kuo has a pretty solid track record for Apple predictions, so you can take these rumors a little more seriously than many of the others that tend to pop up around Apple devices.

In his note, Kuo said that the first new version of the Apple Watch 2 will have GPS capability and a barometer sensor, both of which are absent in the current version of the Apple Watch.

This version will also sport a larger battery, improved water-proofing, a thinner display (though the device thickness will remain the same) and include a faster 16 nanometer processor.

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If true, the addition of GPS and a barometer would be significant upgrades over the current Apple Watch. A faster processor is also welcome. But notably missing is a redesign of the device that debuted nearly two years ago.

Perhaps Apple will give its wearable tech longer design cycles than it does its iPhones (which it redesigns every two years), or maybe Kuo is wrong and we'll actually see an Apple Watch redesign this year. Anything's possible at this point.

The second version of the Apple Watch Kuo mentioned will essentially be a slightly enhanced version of Apple's current smartwatch. Don't expect GPS or a barometer in this one, but do expect some level of increased water-proofing and a 16 nanometer processor as well.

Also, Kuo expects some sort of price cut for the device, though it's still unclear how. Apple might cut the existing Apple Watch price again, or it could sell the slightly improved Apple Watch 2 at a lower price. Either way, it sounds like consumers will be able to get their hands on an Apple Watch for at least a little bit cheaper than the current $299 price tag.

Will these rumored upgrades be enough?

At face value, I'm a bit skeptical that these changes will convince consumers who are currently sitting on their wallets to open them up. Here's why:

Apple is the No. 1 selling smartwatch right now, but sales have fallen 55% since its initial launch, according to IDC. Worldwide smartwatch shipments are down 32% year-over-year for the first time ever. That could be because people are waiting for the Apple Watch 2 to come out, or it could mean that almost everyone who wants an Apple Watch already has one.

Apple is always pushing thinner and lighter iPhones to prospective buyers every two years, and I think consumers might push back if Apple isn't providing the same thing for its Apple Watch (which is already a bit too thick). Some rumors do suggest the new Apple Watch could be up to 40% thinner. If so, then I think Apple has a much better chance at getting its smartwatches to fly off the shelves again.

Additionally, Kuo doesn't say that either Apple Watch 2 version will have its own cellular connection. Which means, of course, that the device will still be dependent on the iPhone. I think that might keep consumers away from the device as well as they wait for the next upgrade.

We're still at the beginning stages of the smartwatch market, so there's not really any past consumer sentiment we can go on for what people expect out of new smartwatches, and how often those changes should come. It appears Apple, as usual, is taking the conservative route and issuing incremental changes at this point.

Apple has the ability to take it slow right now, as its nearest smartwatch rival, Samsung, shipped 1 million fewer smartwatches in the most recent quarter.

But I think this slow pace, if true, could also backfire if Apple doesn't offer enough new hardware features. Smartwatches still aren't a must-have product for most people -- and adding GPS and a barometer, without a full redesign, might not be enough to fix that.

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Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.