Amazon working on music subscription service for $5 a month: Recode Inc is working on a music subscription service that would cost about $5 a month and would , tech news website Recode reported, citing sources.

Amazon would like to launch the services in September, but has not finalized deals with major music labels and publishers, Recode reported.

Amazon was preparing to launch a standalone music streaming subscription service at $9.99 per month, in line with major rivals, Reuters reported in June, citing sources.

The Recode report said one sticking point, sources say, is whether Amazon will sell the cheaper service for $4 or $5 a month.

Amazon was not immediately available to comment.

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Watchdog slams Ashley Madison over privacy failures

The company behind controversial infidelity dating site Ashley Madison – the victim of one of the worst corporate computer hacks in recent Canadian history – had “inadequate security safeguards and policies” and deceived users with a “phony trustmark icon” on its homepage, the country’s privacy watchdog found in a year-long investigation made public Tuesday.

In a sweeping order, the Office of the Privacy Commissioner of Canada demanded the company build better internal security systems, offer users more control over their data in order to mitigate the risk of another data breach and also remove fake “security awards” the company had posted on its website. The order, which the company has agreed to, comes just a month after Ruby Corp., formerly known as Avid Life Media Inc., appointed a new chief executive officer and launched a marketing campaign aiming to broaden its appeal and win back trust.

It’s also one of the first compliance orders the OPC has issued under new powers it obtained in 2015’s amendments to Canada’s Personal Information Protection and Electronic Documents Act.

Previously, the OPC issued only non-binding reports and recommendations after investigations, though failure to act on those recommendations was sometimes referred to federal courts for enforcement.

In July, 2015, a group of hackers calling itself the Impact Team published personal details about the more than 30 million Ashley Madison users who signed up presumably to have an affair, find a sugar daddy or live the life of a cougar (just some of the dating services offered by the 14-year-old company).

The hackers also released thousands of internal e-mails stolen from Toronto-based Avid Life Media, which painted a picture of a company that was reckless with its internal security controls, loose with user data, and also in the business of creating thousands of fake accounts for fictional women to boost revenue and engagement by luring male users.

Privacy Commissioner of Canada Daniel Therrien took the extraordinary step of initiating the investigation himself in co-operation with the Office of the Australian Information Commissioner – after his office was contacted by several users who didn’t want to become the face of a government investigation into the scandalous service.

“The number of individuals affected was large,” Mr. Therrien said in an interview. “People may have reservations about the services offered by the site, but this case showed itself to be symptomatic of problems that might exist elsewhere. In 2016, many companies rely on the collection and handling of much personal information as part of their business model. We see too often they do not have a comprehensive security model. Many, many companies fall short. I can only hope this event will lead to companies paying attention to the risks.”

Outlining the worrisome behaviour by the former Avid Life, the OPC report found its encryption keys – needed to protect user communications – were stored as plain text files on its computers, making them easy targets for thefts in the event of a security breach. It also had poor controls on remote access to its system – including storing critical shared-drive credentials in a Google document available to all users.

“That is the equivalent of locking the door and leaving the key in the door,” Mr. Therrien said.

Eldon Sprickerhoff, founder and chief security strategist of eSentire, a digital security company based in Cambridge, Ont., called the incident “a cautionary tale.”

“Had Ashley Madison gone through a thorough PCI (Payment Card Industry) audit, they would have failed based on the measures they had in place at the time of the hack,” Mr. Sprickerhoff said. “This hasn’t gone away. All of the data from the Ashley Madison hack is still widely available on the dark Web, which is a testament to the longevity and far-reaching impacts of a breach like this.”

During the initial phase of the investigation, Avid Life admitted it was still using fabricated credentials that it posted on its website, which implied it had a third-party “trusted security award.” Even before the compliance agreement was in place, the company removed those fake certificates.

“The company’s use of a fictitious security trustmark meant individuals’ consent was improperly obtained,” Mr. Therrien wrote in the report.

“We hope that by openly speaking about the breach and our commitments to the OPC and the OAIC, we can help other organizations and business leaders who are facing increased cybersecurity challenges,” Rob Segal, who became chief executive officer of Ruby in April, said in a statement released by the company. Representatives declined to comment further. “The company has co-operated with the commissioners throughout their investigation and will continue to share information with them as we honour the terms of the compliance agreement and enforceable undertaking.”

In July, Ruby told Reuters that it expects to earn $80-million in revenue in 2016, down from $109-million in 2015. Once valued in the billion-dollar range by departed founder and former CEO Noel Biderman, the new executive team admits it is no longer worth that lofty figure. The company has even begun to play down the infidelity elements of its “discreet dating” services and recently began a new brand offensive centred around the slogan “Choose your moment.”

The agreement is enforceable in Canada because if the terms are not met according to the opinion of the commissioner, it can refer the case to federal courts to carry out the orders, or seek other judicial relief. The commissioner can also request documents and information, as well as conduct visits to Ruby’s head office with 10 days’ notice, to ensure the orders are being complied with.

“We’ll look at how they comply with this agreement. We’re mindful they have used deceptive practices in the past,” Mr. Therrien said.

Among the undertakings agreed to by Mr. Segal are commitments to ensure that it has built a proper security framework by May 31, 2017. It also has to stop by March 31, 2017 its practice of indefinitely storing personal user information, and also create a system to verify the accuracy of e-mail addresses used to sign up (or to remove the e-mail sign-up requirement).

That last provision is in response to the uncomfortable spot many people found themselves in when Ashley Madison’s e-mails were published online.“People who had never actually signed up for Ashley Madison [were] included in the databases published online following the breach,” the report explains. “This issue raised particular concerns given that, for both users and non-users, any association with a site such as Ashley Madison could cause serious reputational harm.”

Another condition of the agreement is to maintain its policy, enacted in September, 2015, following the breach, of deleting user information at no charge. Prior to the breach, Ashley Madison sites would charge users a fee to remove the person’s data, though it was revealed that even if the company collected the fee, the data sometimes remained in the system.

News of the hack was front-page news in 2015, but it did not serve as a wake-up call to other businesses who experts say still haven’t secured sensitive data in the ways the OPC is now demanding.

“It is a pandemic; breaches are the third certainty in life,” says Adam Levin, chairman and founder of IDT911, an Arizona-based identity theft protection and data breach prevention company, as well as the author of the book Swiped. “You’ve got to take it more seriously. The personally identifying data of a company’s employees and customers deserves the same respect and security as intellectual property and trade secrets. It’s changing; we’re getting better, but we’re certainly not there yet.”

Ruby and Ashley Madison still face class-action lawsuits in Canada and the United States, and the U.S. Federal Trade Commission has also opened an investigation into its use of so-called fembots, the fake profiles revealed by the hack that in some cases were still interacting with users well into 2015.

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Software developer Informatica forecasts doubling of valuation in five years

Informatica Corp., a privately held software developer, said it expects its valuation to double to at least $10-billion (U.S.) in the next five years, driven by investments in big data and cloud computing.

The Redwood City, Calif.-based company was taken private last year by Permira and the Canada Pension Plan Investment Board (CPPIB) for about $5.3-billion. Informatica also has Microsoft Corp. and Salesforce Inc. as strategic investors.

The company is aiming to go public again in early 2019, chief product officer Amit Walia told Reuters in an interview.

“We have been public for the longest time and for us to go public again is on the cards,” Mr. Walia said.

The 23-year-old company, whose customers include General Electric Co. and Inc., provides cloud-based data management tools to businesses.

“The change in valuation will come from investing in growth areas, the top ones being cloud and big data,” Mr. Walia said.

Informatica has a 22-per-cent share of the market for “integrated platform-as-a-service,” a cloud-computing model that helps customers develop applications and manage data over the Internet.

The market is dominated by companies such as Amazon, Salesforce and Microsoft.

“We have a 50-per-cent growth rate in the cloud area. … I do not think it will take us long to grow our market share in cloud to a third of the total,” Mr. Walia said.

Informatica, which generated over $1-billion in revenue in 2015, plans to invest in startups, beef up its hiring capacity and invest further in research and development to boost growth.

The company allows startups to use its cloud platform to connect to various customers through a revenue-sharing model.

This exempts startups from paying a huge fee at the beginning and requires them to pay Informatica a share of their revenue as they grow.

“Strategically they are in a good place … in cloud management,” said Patrick Moorhead, an analyst at Moor Insights & Strategy, adding that if the company is successful in this space it will not be a problem for its valuation to double.

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World Wide Web turns 25

Twenty-five years ago on Tuesday, Tim Berners-Lee, a Briton working at the European Organization for Nuclear Research, opened public access to the World Wide Web for the first time.

Aug. 23 is now called Internaut Day, a name that combines “Internet” and “astronaut,” as early technical Internet users were called.

That small first step, outlined by Mr. Berners-Lee in a paper called “Information Management: A Proposal,” allowed non-technical computer experts to use the Internet in a simple way, starting with a single website in 1991 (archived at ). Twenty-five years later, there are now .

“I happened to be in the right place at the right time, and I happened to have the right combination of background,” Mr. Berners-Lee told Time magazine in 2014.

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Toronto’s smart thermostat startup Ecobee gets $35-million funding boost

The clean technology startup that brought WiFi thermostats to life is hoping to reach more homes across North America after securing $35-million in funding led by Toronto’s Thomvest Asset Management Inc., with participation from Amazon’s Alexa Fund and Toronto’s Relay Ventures.

Toronto-based Ecobee, founded in 2007, touts itself as having introduced the first smart WiFi thermostat on the market. Ecobee thermostats are controlled through a Web portal and an app available for iOS, Android and the Apple Watch, and can include up to 32 remote sensors, so users can change the temperature based on the rooms they are in.

According to research firm NPD Group, Ecobee is the second-most popular smart thermostat in the United States (where the company sells the majority of its products) with a 24-per-cent market share, behind Nest, a thermostat company that was purchased by Google in 2014 for $3.2-billion (U.S.).

Ecobee’s CEO, Stuart Lombard – who was previously a partner at Relay Ventures – said the $35-million (Canadian) investment will go toward innovating the company’s product, improving customer experience and growing the brand’s position in the market.

The company plans to add 100 employees to its current staff of about 150.

Mr. Lombard said part of what makes Ecobee different from its competitors is that the system uses remote sensors to address the problem of hot or cold spots in the home. While he acknowledged that adjusting temperatures based on sensors in specific rooms might be less efficient at times – for example, turning on cooling for an entire home when a customer is in one room – he said the net result is that the Ecobee system is more energy efficient. According to Mr. Lombard, Ecobee saves consumers an average of 23 per cent on household heating and cooling bills.

A key part of his growth strategy includes partnering Ecobee with high-tech home automation systems, including Apple’s HomeKit and Amazon Echo, which uses the company’s Alexa voice-activated artificial intelligence program. These smart home technologies allow users to control such things as lighting, appliances, security, heating and cooling using the Internet.

Ecobee was the first WiFi thermostat system to be compatible with Amazon Echo, which is not yet available in Canada. The investment from the Alexa Fund – the largest payout made by the $100-million (U.S.) venture fund to date – was a natural fit for the fund, given that it focuses on investments in the field of voice technology, said Doug Booms, vice-president of corporate development at Amazon.

“Our goal with the Alexa Fund is to fuel voice technology innovation and to enable companies building on Alexa or integrating Alexa into their products,” Mr. Booms said in an e-mailed statement. “We want Ecobee to have the resources required to continue its mission and also to invent further compelling connected home technologies.”

Mr. Lombard said that about one-third of Ecobee consumers have their devices connected through the Alexa-enabled Amazon Echo, Apple’s HomeKit or Samsung’s version, SmartThings.

He said Ecobee’s key demographic comprises people looking to save money on their heating and cooling bills. Ecobee, which sells for about $350 (Canadian), can save that much in about 12 to 18 months on average, he said.

Naomi Manley-Casimir, managing director at the Accenture Innovation Centre for Utilities, said consumers are increasingly adopting smart technologies such as WiFi thermostats. She pointed specifically to millennials, who are 77 per cent more likely to be more satisfied if offered a monitoring device that provides energy-usage feedback, according to Accenture’s New Energy Consumer research.

The same research found that 43 per cent of Canadian respondents anticipate they will have an interest in smart thermostats in the next five years, compared with 41 per cent in the United States

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Japanese hedge fund robot outsmarts human master, passes Brexit test

Yoshinori Nomura felt like weeping. It was the morning of June 24, Brexit day, and markets were moving against him.

Well, not against him, exactly. It was the hedge fund manager’s self-learning computer program that had placed the bet, selling Japanese stock-index futures before a sizable market advance. Nomura had anticipated a rally, but decided not to interfere, and his fund was paying the price.

Then, in an instant, everything changed. When new vote counts signalled Britain was going to leave the European Union, a burst of selling sent Japanese shares to their biggest drop in five years. By luck or design, Mr. Nomura’s Simplex Equity Futures Strategy Fund ended the day with a 3.4-per-cent gain, one of its best results in three months of trading.

“The machine was right after all,” said Mr. Nomura, who spent more than three years refining his trading program and now oversees about ¥3.5-billion ($44-million) in the fund, one of the first in Japan to utilize artificial intelligence technology.

Mr. Nomura doesn’t have the assets or name recognition of computer-savvy giants such as Renaissance Technologies or Two Sigma Investments. But in his own way, the Tokyo-based physics buff has become a compelling test case for what some say is the future of money management. If Mr. Nomura can succeed in Japan – where central bank stimulus has upended markets, hedge funds are trailing global peers and institutional investors are notoriously risk averse – it would offer hope for fledgling AI traders around the world.

The 43-year-old money manager is setting his software loose in one of the planet’s most turbulent markets. Share-price swings in Japan rank No. 1 among the world’s 15 largest stock venues, with volatility readings almost four times higher than in the United States. The benchmark Topix index has tumbled 16 per cent this year, following an almost 10 per cent rally in 2015.

The tumult has been rough on hedge funds, with a gauge of Japan-focused managers tracked by Eurekahedge PTE dropping 3.5 per cent this year. That’s the worst performance since the global financial crisis and compares with a 2.6-per-cent gain for the research firm’s index of managers worldwide.

It makes for a difficult backdrop as Mr. Nomura tries to drum up appetite for a strategy with almost no real-world track record. Some prospective institutional clients are so hesitant to stick their neck out for an unfamiliar product that they asked Mr. Nomura to remove the term AI from Simplex’s promotional materials. They didn’t want to have to explain how it works to their bosses, he said.

“There are very few AI funds currently out there globally,” said Mohammad Hassan, a senior analyst at Eurekahedge in Singapore. “These early adopters of machine-learning methodologies will need to build a good track record before investors give them serious attention.”

It’s often difficult to distinguish AI funds from their more ubiquitous “quantitative” investing precursors, according to Motoyuki Sato, a general manager and researcher at Man Group Japan Ltd., a unit of the world’s largest publicly traded hedge fund manager. While they both rely on computers to make investment decisions, AI programs go a step further than so-called quant software by attempting to improve themselves over time – mimicking the human brain’s capacity for learning.

Mr. Nomura’s strategy appears to blend elements of quantitative analysis and AI, said Kiyoshi Izumi, a professor at Tokyo University who has written a book on the technology’s investment applications.

The Simplex fund, like many of its peers, crunches a mind-boggling amount of data to answer a simple question: buy or sell? Mr. Nomura’s software focuses on indicators of momentum and trend deviation, making a decision twice a day on whether to purchase or sell futures on the Topix index. It also determines the position’s size, with a cap at 50 per cent of fund assets.

If his program works as designed, Mr. Nomura says, its predictive power should improve over time. And while it’s hard to draw any conclusions after just a few months of trading, the early results are promising. Mr. Nomura’s fund is up 1.9 per cent from its inception in April through Aug. 19, and he’s targeting annual returns of 7 per cent.

AI-driven hedge funds around the world appear to be doing pretty well, too. A Eurekahedge gauge of 12 such funds has gained almost 7 per cent this year, including a 1.8 per cent advance during the Brexit-fuelled market turmoil in June.

That may explain why some of the biggest names in investing are adopting AI technology as they look for an edge amid disappointing industry-wide returns and increased scrutiny of management fees. Point72 Asset Management, which oversees billionaire Steven Cohen’s wealth, set up a vehicle to fund AI startups in March, while Ray Dalio’s Bridgewater Associates devoted resources to the field last year.

While Mr. Nomura’s fund is starting small, his firm is no lightweight. Simplex Asset Management is one of Japan’s fastest-growing money managers, overseeing ¥560-billion for clients. Mr. Nomura joined Simplex in 2007, after stints at Accenture PLC and Citigroup Global Markets. He has a master’s degree in physics from Tokyo’s Waseda University and three patents to his name, including an algorithm designed to predict hit songs in pop-obsessed Japan.

Despite the challenges of selling an unfamiliar strategy, Mr. Nomura expects his fund’s assets under management to double by the end of the year amid interest from regional banks and insurers.

At least one major investor in Japan is watching the space closely. Japan Post Bank Co.’s $2-trillion (U.S.) investment unit is interested in AI technology and is aware of Simplex’s fund, according to Naohide Une, managing director of the bank’s division overseeing hedge fund investments.

“Somebody like Simplex is well positioned,” said Bartt Kellermann, the founder of Global Capital Acquisition, which organizes “Battle of the Quants” conferences for computer-driven investors in the United States, Europe and Asia. “As every day goes by, the machine becomes more intelligent. It’s going to be a brave new world.”

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U.S. judge rejects $100-million settlement in key case with Uber drivers

A federal judge has rejected a legal settlement that would have divided up to $100-million (U.S.) among about 380,000 Uber drivers to resolve claims the ride-hailing service has been exploiting them by treating them as independent contractors instead of employees.

U.S. District Judge Edward Chen declared the deal unfair in a decision issued late Thursday, complicating Uber’s efforts to remove the legal threat of having its drivers classified as employees.

That distinction would give Uber’s drivers more rights and benefits. That would in turn force the San Francisco company to change its business in ways that would cause its expenses to soar and potentially undercut its plans to eventually sell its stock in an initial public offering.

Uber expressed its disappointment with Chen’s ruling in a statement that said the company will consider its options. The alternatives include taking the case to trial, awaiting rulings in two appeals that would bolster Uber’s cause, or negotiating a revised settlement with the drivers in an attempt to appease Chen.

In another case earlier this year, Uber rival Lyft initially had a similar settlement with its drivers rejected by a different judge. Lyft raised its initial offer from $12.5-million to $27-million, good enough to win preliminary approval from U.S. District Judge Vince Chhabria in June.

Shannon Liss-Riordan, the lead attorney representing the Uber drivers, said she thinks a revised settlement is possible in this lawsuit, too. If not, she is prepared to take the case to trial, she told The Associated Press in an email. In that event, the case could be whittled to about 8,000 drivers because of binding arbitration clauses that Uber holds.

“I am disappointed the judge did not approve the settlement, but I understand and I have heard him,” Liss-Riordan wrote.

The agreement would have required Uber to pay at least $84-million to drivers in California and Massachusetts who had been picking up riders who requested them through the company’s service dating back to August 2009. Uber would have paid another $16-million to the drivers if the company’s market value increased by 1.5 times within the first year of its IPO.

If everyone covered in the lawsuit had filed for payments, the California drivers would have received an average of $10 to $1,950 apiece and the Massachusetts drivers would have received an average of $12 to $979.

Uber is currently a privately held company backed by venture capitalists and other investors who have valued the business at more than $60-billion, though some analysts question the reliability of that figure.

Chen also is skeptical of Uber’s prospects in an IPO, saying in his decision that he based his conclusions that the company would only end up paying the drivers a minimum of $84-million.

Most of the money would be designated to settle claims that Uber had been cheating them by refusing to reimburse them for mileage and phone usage while also refusing to pay them for overtime and prohibiting passengers from tipping them. Had the case gone to trial and the drivers prevailed on them, they might have won estimated $854-million, based on estimates from the drivers’ attorneys.

Given the risks facing the drivers had they not won those specific claims in a trial, Chen concluded the $84-million would have been a “fair and adequate” amount.

But Chen was troubled that the settlement also would have prevented the drivers from pursuing claims on a variety of other employment issues that could have generated another $1-billion in a trial verdict favouring their arguments. Lumping in those potential liabilities, the proposed settlement would be paying the drivers less than 5 per cent of what they could win in a trial – a sum that Chen concluded “is not fair, adequate or reasonable.”

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AT&T, Apple, Google to work on ‘robocall’ crackdown

More than 30 major technology companies are joining the U.S. government to crack down on automated, prerecorded telephone calls that regulators have labelled a “scourge.”

AT&T Inc, Google parent Alphabet Inc, Apple Inc, Verizon Communications Inc and Comcast Corp are among the members of the “Robocall Strike Force,” which will work with the U.S. Federal Communications Commission. The group was holding its first meeting with the FCC on Friday.

The strike force will report to the commission by Oct. 19 on “concrete plans to accelerate the development and adoption of new tools and solutions,” said AT&T Chief Executive Officer Randall Stephenson, who is chairing the group.

The group hopes to put in place Caller ID verification standards that would help block calls from spoofed phone numbers and to consider a “Do Not Originate” list that would block spoofers from impersonating specific phone numbers from governments, banks or others.

FCC Chairman Tom Wheeler in July urged major companies to take new action to block robocalls, which often come from telemarketers or scam artists.

“This scourge must stop,” Wheeler said on Friday, calling robocalls the No. 1 complaint from consumers.

Wheeler has said robocalls continue “due in large part to industry inaction.”

“The bad guys are beating the good guys with technology,” Wheeler said.

Stephenson emphasized “the breadth and complexity” of the robocall problem.

“This is going to require more than individual company initiatives and one-off blocking apps,” Stephenson said. “Robocallers are a formidable adversary, notoriously hard to stop.”

The FCC does not require phone providers to offer robocall blocking and filtering but has strongly encouraged providers to offer those services at no charge to consumers.

The strike force brings together carriers, device makers, operating system developers, network designers and the government.

“We have to come out of this with a comprehensive play book for all of us to go execute,” Stephenson said. “We have calls that are perfectly legal, but unwanted, like telemarketers and public opinion surveyors. At the other end of the spectrum, we have millions of calls that are blatantly illegal.”

Stephenson said technical experts representing the companies have had “preliminary conversations about short– and longer-term initiatives.”

Other companies taking part include Blackberry Ltd, British Telecommunications Plc, Charter Communications Inc, Frontier Communications, LG Electronics Inc, Microsoft Corp, Nokia Corp, Qualcomm Inc, Samsung Electronics Co Ltd, Sirius XM Holdings Inc, T-Mobile US Inc and U.S. Cellular Corp.

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Vietnam bans Pokemon Go from government, defence sites

Vietnam has banned players of the game Pokemon Go from the offices of its government and ruling Communist Party, besides defence locations, as thousands of its citizens get swept up in the frenzy to capture virtual cartoon characters.

Hundreds of thousands of players have downloaded the game since its Aug. 6 launch in Vietnam, with many annotating the Google version of the country’s map to aid their quest, the Information and Communications Ministry said in a statement.

The game is not licensed, however, and people should not play it “near or inside the areas of offices of the Communist Party, the state, the military and national defence sites and other restricted areas”, the ministry said late on Wednesday.

Players engrossed in the game may run into trouble in spots such as railways, highways, airports, rivers, lakes and mountains, apart from the risk of losing personal information, the ministry added.

“Playing Pokemon Go while in traffic causes more bad than good influence on people,” Captain Nguyen Minh Duc of the Hanoi traffic police told an online forum on Thursday.

“Traffic rule breakers do not only cause harm to themselves but also affect others.”

Pokemon Go uses augmented reality and Google mapping to make animated characters appear in the real world, overlaid on the nearby landscape viewed through players’ mobile phone cameras.

The game has prompted safety warnings after players glued to their phones stumbled, were robbed or wandered into dangerous places.

Last week neighbouring Cambodia banned the game from a former Khmer Rouge torture centre and prison after players showed up at the site, now a genocide museum, hunting for Pokemon characters.

Thailand also plans to place spots such as the Royal Palace grounds, Buddhist temples and hospitals out of bounds for Pokemon Go players.

Vietnam and Thailand have the fastest growing smartphone markets in Southeast Asia, along with the Philippines.

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Apple having trouble cutting watch ties to iPhone

Apple Inc. has hit roadblocks in making major changes that would connect its watch to cellular networks and make it less dependent on the iPhone, according to people with knowledge of the matter. The company still plans to announce new watch models this fall boasting improvements to health tracking.

The updated versions will also be able to integrate GPS-based location tracking, according to the people, who asked not to be identified because the plans aren’t public. An Apple spokeswoman declined to comment.

Apple shipped its first watch in April, 2015, hoping for a new blockbuster product amid slowing iPhone sales, which contribute almost 60 per cent of revenue. While the company shipped 1.6 million watches from April to June, that was less than half as many as during the same period in 2015, according to IDC.

With investors expecting a revenue decline this fiscal year, chief executive officer Tim Cook is banking on a slew of new gadgets, including a new iPhone with a faster chip and improved cameras, and a slimmer MacBook Pro laptop, to reignite growth in 2017.

Ever since its inception, network carriers have been urging Apple to release a version of the watch that can connect to data networks independent of the iPhone, and the Cupertino, Calif.-based company had been working to untether it from the handset, one of the people said. As it is now, the watch must be synced with an iPhone to download most types of content and consistently track location.

Apple had been in talks this year with mobile-phone carriers in the United States and Europe to add cellular connectivity to the watch, according to people familiar with the talks. A cellular chip would have theoretically allowed the product to download sports score alerts, e-mail and mapping information while out of an iPhone’s reach.

During the discussions, Apple executives expressed concern that the cellular models may not be ready for release this year and that the feature may be pushed back to a later generation, according to the people. Apple warned that, even on an aggressive schedule, the earliest possible shipment time-frame for cellular models would have been this December, one of the people said.

The source of the delay is that current cellular chips consume too much battery life, reducing the product’s effectiveness and limiting user appeal, according to three of the people. Apple has begun studying lower-power cellular data chips for future smartwatch generations.

Even without cellular connectivity, Apple still anticipates shipping models of the watch that can more precisely determine a user’s location by way of GPS chips that communicate with satellites. This technology would allow the device to track running and walking distances more precisely and improve the accuracy of data submitted to health tracking applications, two of the people said. The GPS would also make navigation on the watch more accurate, the people said.

Apple said in June that it’s adding health features, such as a new app to track breathing, and watch faces with integrated activity statistics, to the device’s software this fall. The update also launches apps more quickly, allows users to more easily move between different watch faces, and adds a new swipe-up menu to access battery and audio controls.

While the plan for this year had been to at least partially untether the watch from the iPhone, Apple’s ultimate goal is to eliminate any need to connect the two devices, according to a person familiar with the company’s strategy. That ambition is currently stymied by technological limitations.

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