Apple Debuts a Watch That Can Make Calls Without an IPhone

(Bloomberg) -- Apple Inc. unveiled a new Watch on Tuesday that can make calls and access the internet without an iPhone nearby, freeing the device from a limitation that had given some potential buyers pause.

The new version, called Apple Watch Series 3, will use an existing iPhone phone number when making calls, Apple said. It supports the LTE high-speed mobile wireless data standard so users can stream music and check digital maps on their wrist. Previous Apple Watches needed to be tethered wirelessly to an iPhone. 

The LTE Watch starts at $399 and will be available Sept. 22. It has a new processor that is 70 percent faster than last year’s chip, Apple executive Jeff Williams said at the product’s introduction. Apple shares rose 1.1 percent to $163.30 after the company discussed the Watch.

Apple Chief Executive Officer Tim Cook unveiled the Apple Watch in September 2014, banking on the product being the company’s next big category. So far, though, it’s mostly been an accessory to the iPhone. The company’s Other Products unit, which includes the Watch, represented 6 percent of Apple’s sales in its most recent quarter. However, the new LTE models may spur new sales as some consumers were turned off by the previous model’s inability to free the Watch from their iPhones.

Apple initially marketed the Watch as a luxury item, but it has focused more on health and fitness recently. That’s even as established luxury watch makers release smartwatches that cost thousands of dollars. Cook said on Tuesday that the Apple Watch is now the largest watch brand by revenue, overtaking Rolex, and touted new health uses.

Cook said recently that the Watch was the best-selling smartwatch "by a very wide margin," while noting sales of the device grew more than 50 percent in the third quarter. In the larger wearables category, which includes cheaper fitness bands, Apple ranks third behind Xiaomi Corp. and Fitbit Inc., according to research firm Strategy Analytics.

Bloomberg News reported in August that the new Apple Watch would include an option for connecting to LTE networks.

To contact the reporter on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net.

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Molly Schuetz