The GPS doesn't have to use any battery if it's not in active use. My Garmin watch goes about 10 hours during an activity that uses the GPS constantly, and I've seen it go as long as 2 weeks when I'm not using it at all.
Let's go with this (I've got a Garmin 410 with similar specs) --
Ten hours of GPS is three percent of the time you get with two weeks of no GPS. Another way to say this is, with a full charge and GPS active, the battery lasts only 3% of the total time it could last if GPS was turned off. If you (or I) use GPS for a decent four-hour bike ride, you've knocked down half the battery, and would also have half the non-GPS reserve power available.
Let's say a hypothetical AW with GPS is similarly efficient, just to make it easier for us armchair engineers.
Apple states 18 hours of battery life for the current model, although most of us on the forums end the day with 30-40% remaining. Better than Apple's figures, so that's cool. Let's keep it easy and say we get a square 24 hours of battery life.
Three percent of 24 hours is 43 minutes. Again, this is assuming an AW with GPS is as efficient as the Garmin. This also means, for the sake of starting with a full battery, you can't use the AW for anything else before your GPS-tracked workout, and it'll be stone dead by the end.
We're also not accounting for the different power requirements of a wireless HR strap versus optical HR sensors.*
What if the AW gets a GPS with twice the power efficiency? We can have up to 90 minutes of tracking a run or bike ride and nothing else. Still not very useful, and to me, it seems like a waste of all the other capabilities of the AW.
And, we're still not including any data radios such as ANT+, wifi, or LTE. I've opined before that a GPS-equipped smartwatch should also have data access so it could be as capable as we'd want it to be -- more than just workouts, it should give us mapping directions, local business searches, etc.
So, with a bare-bones GPS enabled, with zero data downloading or HR tracking, we can have an AW with maybe an hour's worth of usage. The rest of the day, it would be a tiny paperweight.
Or, we can track a 30-minute workout -- still with no HR or anything else -- and have 8-12 hours of regular usage, meaning that we'd need to pop it on the charger at work or in the car, which then defeats the idea of a smartwatch we'd want to wear all day long.
I don't see being able to jam a GPS inside the AW at its current size with current battery technology. I also don't want a fatter, overweight AW -- that's my Garmin, and I stopped trying to wear it as a daily watch long ago. I think we're barking up the wrong tree every time we think we want GPS in the AW sometime this decade.
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*Speaking of optical HR, you've noticed that the green LEDs aren't being driven as brightly as possible, yes? Turn them on and watch them while moving the watch -- you'll see that they're actually flashing, not steady. Bicycle LEDs use a similar setting when in mid- and low-power modes. They also get several hours of battery life in their lowest settings, and with much bigger batteries than you'd ever want on your wrist (one of mine used a four-pack of AAs). Apple is already trying to conserve power with the LED sensor settings; do you think they want to add anything to gobble up more power?