The Wall Street Journal cites in its report surrounding the original Apple Watch that Apple is working on adding cellular network connectivity and a faster processor to the next generation Apple Watch.
The standalone modem inside the Apple Watch 2 will allow the smartwatch to function independent of the iPhone. The current generation Apple Watch heavily relies on the iPhone for any network related tasks, which essentially makes it useless when it is not connected to one. An integrated modem will allow the smartwatch to circumvent this problem, though it will also increase its power requirements.
Given that the Apple Watch is currently limited by its limited processing power, it is not surprising to expect Apple to include a faster processor in the Apple Watch 2.
The report pegs that Apple sold anywhere between 12-13 million units of the Apple Watch in the first year of its availability, which is almost twice of what the original iPhone sold. However, despite these promising numbers, the Apple Watch has not managed to catch the attention of consumers. This is likely due to the limited and sub-par functionality the smartwatch offers, and because it does not offer anything that the iPhone itself cannot do.
It is unclear when Apple plans on launching the Apple Watch 2. There have also been conflicting reports about the features it will pack, with one report claiming that it will be 40 percent thinner than its predecessor and debut at WWDC 2016, while the other claims that it will focus solely on internal improvements.[Via Wall Street Journal]