Although watchOS 4 doesn’t drop support for any Apple Watch models, the new iOS 11 software update will not be available for the iPhone 5 and iPhone 5c. This likely means Apple Watch users with either of those models will need to upgrade to a newer iPhone to update to watchOS 4.
Apple Watch has always required a compatible iPhone to be activated and for most operations including updating software versions. The paired iPhone also needs to be on the latest iOS update for the Watch app to see the latest watchOS software update.
For example, you need iOS 9 to update Apple Watch to watchOS 2 and iOS 10 to update Apple Watch to watchOS 3. If that doesn’t change before watchOS 4 is released later this fall, iPhone 5 and iPhone 5c users who cannot update to iOS 11 will not be able to update Apple Watch to the latest software version.
Another consequence of iOS 11 dropping the iPhone 5 and iPhone 5c (and changing which required iPhones are compatible with the Apple Watch for the first time) is that iPhone 5 and iPhone 5c users will need a newer iPhone if buying a new Apple Watch running watchOS 4 out-of-the-box this fall.
This could change if Apple Watch drops the iPhone requirement and gains the ability to be activated over Wi-Fi (or maybe even cellular), but until that happens it’s probably safe to assume iPhone 5 and 5c users will be stuck on watchOS 3 and the current Apple Watches.
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