A Canalys study found 68 per cent of current iPhone users worldwide will be unable to use the latest Apple Watch Series 3 on a cellular network, with the device launching to a “limited addressable market”.

Apple unveiled its latest smartwatch last week, with a major push on its headline new feature, an integrated eSIM supporting both LTE and UMTS connectivity, allowing users to make and receive calls, and text messages, without tethering to an iPhone.

However, Canalys pointed out only 14 mobile operators across eight countries will support this functionality at launch. Unlike Apple’s cellular connected iPads, customers will not be able to use tariffs from their choice of operator for the new watch.

The cellular functionality, on the other hand, requires a “companion iPhone, and that iPhone must be using a postpaid SIM from an eligible carrier”.

“This means that most iPhones in use around the world will be unable to use Apple Watch cellular at launch,” warned Canalys.

It also said the watch will be further limited in China, the world’s largest smartphone market, as it will launch in five regions in the country, but not the capital city Beijing.

Restricted access
Canalys analyst Ben Stanton pointed out that while the current iPhone user base sits at 517 million, only 164 million are using the “right iPhones, with the right carrier, on the right tariff to work with the new cellular Apple Watch at launch”.

“Apple’s potential buyers are spread across eligible and ineligible operators and contracts, and many will be disappointed,” he said.

He urged Apple to “exert pressure on more carriers to make the required network investment before the buzz around its new product dies down”.

Canalys noted the new watch’s addressable market would increase to 47 per cent when another six planned operators become eligible, but it is unknown when this will happen.

Yesterday, Apple said it was looking into reports its new watch was not functioning as it should. Both The Wall Street Journal and The Verge reported the watch was struggling to cope with handover between Wi-Fi and cellular connections.