The report comes from Chinese tech news site Tech.163, which said that Intel will be working with Apple to build the smart watch, which will reportedly sport a 1.5-inch PMOLED display made by RiTDisplays with ITO-coated glass.
It's not a new idea, as a quick Google search shows that people have wanted this sort of thing for some time. An Apple support forum thread from 2009 asks for advice on a third-party watch.
A late 2011 article theorizes that with Siri, an iPhone could be a superb smart watch.
Apple itself surely isn't blind to the idea: a similar form factor has been in place for some time, with its iPod nano, which is easily attached to a wrist band turning it into a fully functioning watch. Apple even sells such a band in its online store.
According to the source, Apple will launch the smart watch later next year.
It would be an interesting reversal of fortune for the wrist watch. While many still wear watches, many have eschewed them. How many times have you seen someone whip out their iPhone, RAZR Maxx HD or Galaxy S III to check the time (answer: a lot)?
Note to Android fans: there are smart watches for your phone already, but just as with Android fragmentation and smartphones, there is no single biggest provider (are you listening, Samsung?).
To be clear, though, it's not as though the smart watch would be a fully functioning iDevice with a touchscreen. We expect it would be able to display notifications, and perhaps emails and texts. Users could probably answer their calls on it, talking into it a la Dick Tracy.
We'd expect that the watch could even communicate with your iPhone via Bluetooth, using Siri to ask questions and receive answers.
While smart watches haven't exactly become commonplace, there is a market, and if anyone can convince consumers that they absolutely have to have a smart watch, it's Apple.