That is why it calls a fitness tracker and not a smartwatch, as @BKooij rightly points out.
You can compare this with a heart rate monitor strap that you wear on the chest, which only contains a sensor and a Bluetooth module that continuously transmits a number to the phone. However, in this case some sensors have been added and a display hangs on it, but it is and remains a sensor band or a fitness tracker.
A real smartwatch is more like a phone in a watch with its own soc, own storage and more extensive connection options including WiFi, but also more and more an eSim where the watch can directly establish a 4G or 5G connection (also called IoT). You can also install apps on it that add extra functionality because it also runs its own OS.
A fitness band will continuously require a Bluetooth connection, but a smartwatch will do the same. After all, if you want to answer phone calls or receive notifications on your smartwatch, you require a continuous connection, whether via Wifi / 4G / 5G or via Bluetooth.
What a smartwatch does is only occasionally send a buffer of data while a fitness tracker continuously streams data. This means that a fitness tracker spends more energy on its connection where a smartwatch can put the connection on standby. However, in reality and with the new low energy bluetooth connections, the fitness tracker does not have to provide a full SOC with power, so at the end of the day a fitness tracker lasts much longer on battery compared to a smartwatch, even if a fitness tracker uses more on its connection. However, the phone battery will be less with a fitness tracker compared to a smartwatch.
So it is mainly about functionality that a smartwatch adds + more accuracy vs price. After all, using the GPS of the phone, which is in the pocket or in the handbag or in the backpack, on the wrist is going to be more accurate.
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