Some of the new models for the Apple Watch will be equipped with LTE chips and be able to perform many tasks without needing an iPhone to be in range, the report said.
Currently, the Apple Watch needs to be connected to an iPhone to send messages, get directions from maps and stream music.
The iPhone maker is already in talks with carriers in the United States and Europe about offering the cellular version of the Apple Watch, the report said.
Apple and Intel did not immediately respond to requests for comment.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Maju Samuel)