The chip is different: The apple watch7 uses a dual-core S7 SiP chip with a 64-bit dual-core processor and also has GPS, compass, all-weather altimeter, second-generation speaker and microphone capabilities.
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The apple watch series 8 features an S8 chip with a 64-bit dual-core processor, a built-in lithium-ion rechargeable battery for up to 18 hours, and a USB-C magnetic fast charging cable.