Editors' pick: Originally published Jan. 3.

Rumors are percolating about Apple's (AAPL - Get Report)  next-generation Apple Watch and what new features the product, which has been a relative sore spot for the Cupertino, Calif., tech company since its 2015 release, will carry.

The latest rumor came Monday evening as Chinese-language news organization, Economic Daily News (EDN), reported that Taiwan-based notebook and electronic hardware manufacturer Quanta Computer will work on expanding the processing power of the watch and extending the device's battery life. The report builds on rumors that the company could also augment the screen for the watch or the watches band to include greater functionality and features.

While Apple has dominated the smartwatch market it has made few upgrades and the watches have retained a similar design. Apple sold about 7.5 million Apple Watches in 2016, missing its sales forecast of 12 million units for Apple Watch in early 2016.

The EDN report cited that the third-generation Apple Watches will likely be released in the third quarter of 2017. It cautioned customers to temper expectations over inclusions of major new features. The paper added that improving battery efficiency is Quanta's main task for the new Apple Watch and its other hardware will not see much change.

Other reports have cited the possibility that Apple could expand the capabilities or the wristband itself or add a camera to the watch. The potential that Apple may also release a watch with different shaped displays has also circulated. 

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In general, the wearables market has been experiencing challenges this year as consumer interests in the devices has started to wane. Fitbit (FIT - Get Report) , for one, has seen less-than-impressive financial results recently despite efforts to broaden the usage of its devices. On Tuesday the San Fransisco, company said it had added its Fitbit Charge 2 smartwatch to the UnitedHealthcare's (UNH - Get Report) UnitedHealthcare Motion wellness program, powered by Qualcomm (QCOM - Get Report) 's Qualcomm Life to expand into the healthcare business.

On Dec. 7 FitBit acquired the software assets of smartwatch startup Pebble Technology to help it better compete with Apple, which continues to dominate the smart watch market since it hit shelves in April 2015.

Quanta is the current manufacturer of the Apple Watch Series 1 and Series 2. The manufacturing declined to comment, citing market speculation.

Apple shares were down last Friday after Nikkei Asian Review reported that the tech company will cut production of iPhones by approximately 10 percent in the first quarter of 2017, citing calculations based on supplier data.

Apple shares were down 0.26% to $115.52 per share in early Tuesday morning trading.