Apple (NASDAQ: AAPL) finally launched its long-awaited Apple Watch in April of this year after unveiling it during its September 2014 product launch event. Although the device has generally failed to meet the lofty sales expectations put out there by the analyst community at large, it is generally believed to be the most popular smartwatch by a very large margin.

The first generation of the Apple Watch is a very solid device; it looks nice and watchOS is quite pleasing to use, particularly in its second iteration.

However, the Apple Watch that is currently on the market is very much a first-generation product. The bad news is that this means that it's far from perfect, but the good news is that as Apple makes substantial improvements generation-over-generation, the product should see increased demand.

It is with this in mind that I am excited for the next generation Apple Watch, which 9to5Mac's Mark Gurman reports will launch at a March event.

The Apple Watch is a computer, and faster computers are better
The Apple Watch is fundamentally a wrist-worn computer. And, generally speaking, the more compute power that a computer has, the more it can actually do.

According to an analysis performed by AnandTech, the current Apple Watch features a single ARM Cortex A7 processor core running at 520MHz and either a PowerVR SGX543MP1 graphics processor or a PowerVR GX5300 GPU.

To put this into perspective, the Watch's processor is probably quite a bit slower than the A4 chip found inside of the iPhone 4 in both CPU and graphics performance.

I believe that with the next generation Apple Watch, Apple will deliver a major improvement in both processing and graphics performance, which should open up more sophisticated and ultimately richer usage models.

Expect to see more than double the performance
The current generation Apple Watch processor is said to be built on Samsung's (NASDAQOTH: SSNLF) 28-nanometer low power process. The next logical step from here would be for Apple to transition to 14/16-nanometer manufacturing technologies from Samsung and/or TSMC (NYSE: TSM), respectively.

Such a transition would buy Apple's chip teams two things. First, transistors with substantially enhanced performance and power characteristics. This means that if Apple were to simply take the current S1 design and migrate it to new transistor technology, it would likely be able to realize a huge boost in performance (likely by being able to run the CPU/GPU clocks higher at the same power).

Second, the 14/16-nanometer foundry technologies deliver roughly 2x area scaling over the foundry 28-nanometer nodes, which means that Apple can pack in more functionality into a given chip area. This should be helpful for doing things like adding more graphics cores/clusters and even moving to two CPU cores at some point down the line.

Now, although the move to a next generation manufacturing process is certainly important, it's worth noting that Apple is certainly to make architectural improvements -- that is, improvements in the actual design of the chip -- as well.

For example, Apple could move from using a Cortex A7 CPU core to a 64-bit ARM Cortex A53 core in its next chip (I don't think Apple will design a custom CPU core for the wearables market anytime soon). It could also move to a more advanced PowerVR graphics block (perhaps based on the Series 7XT architecture).

Apple is also rumored to be including a camera onto the next generation Apple Watch, so integrating a dedicated image signal processor to handle image capture and processing in an efficient manner may also be in the cards.

With all of the added performance, the possibilities become greater
Adding more performance for the sake of performance is silly; added performance is important to both improving the performance of current software while at the same time enabling fundamentally new software capabilities.

Indeed, Apple's hardware and iOS work together to form a canvas for software developers to create works of art.

With substantially improved performance, I would expect to see much more interesting and powerful software written for the Apple Watch. This would ultimately serve to improve the value proposition of the next generation Apple Watch, ultimately leading to continued sales growth in this category. 

 

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends 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.