The feature was designed to use Intel cellular modems.

Such a feature could have been useful for users in remote locations while hiking, skiing, camping.

So, why did Apple scrap the project?

Apple reportedly scraps rumoured ‘Walkie-Talkie’ feature for the iPhone

Also, part reason could be due to Apple switching to Qualcomm modems for the next few iPhone models.

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source: www.techworm.net