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After a few days of silence, on Sunday Apple confirmed that the iPhone 13 "unlock with Apple Watch" feature will be fixed with a software patch.
A support document published Sunday confirms that the issue is limited to the iPhone 13 family. Apple's text is clear that the issue is limited to some iPhone 13 users only.
"Apple has identified an issue where Unlock with Apple Watch may not work with iPhone 13 devices," Apple said in the support document. "You might see 'Unable to Communicate with Apple Watch' if you try to unlock your iPhone while wearing a face mask, or you might not be able to set up Unlock with Apple Watch."
The text goes on to say that it will be fixed in software. It doesn't address specifically when, which is also addressed by first reporter MacRumors
User Monzilla88 on Reddit first reported the issue to the subreddit r/AppleWatch on Friday. They state that both their iPhone 13 Pro and Apple Watch SE are up to date with the newest iOS and watchOS updates.
The initial claimant said that they had tried unpairing and repairing, hard resetting both devices, turning on and off passcodes but with no success. Ultimately, more users reported that they too had attempted what the initial reporter had tried, and more, with no successes.
"Unlock with Apple Watch" continues to work fine on iOS 15 on older models of iPhone, including the iPhone 11 Pro Max and the iPhone X. Conversations about it have escalated on the Apple Support forums since the Friday report as well, as more users have received iPhone 13 orders.