Apple Watch Bands With Magnets May Cause Interference With Compass on Series 5 Models
New to Apple Watch Series 5 models is a built-in compass that allows users to see which way they are facing, complete with a new Compass app that displays heading, incline, latitude, longitude, and current elevation.
In fine print on its website, however, Apple has indicated that Apple Watch bands with magnets "may cause interference" with the compass. This includes the Milanese Loop, Modern Buckle, and Leather Loop. Sport Bands, Sport Loops, Link Bracelets, Nike, and Hermès bands do not contain magnets.
Magnetic interference can affect any compass, so this is not an Apple Watch issue, but something to keep note of while choosing a band.
Update: Apple has published a support document with more information:
The presence of magnets can affect the accuracy of any compass sensor. Apple's Leather Loop, Milanese Loop, and earlier Sport Loop watch bands use magnets or magnetic material that might interfere with the Apple Watch compass. The compass isn't affected by Sport Loop bands introduced in September 2019, or any version of the Sport Band.
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