The sources of the information were executives from parts suppliers in the Asian supply chain. According to the report, Microsoft asked Asian suppliers to ship it components that could be used for a smartwatch. One executive added that he met with Microsoft's research and development team at the company's headquarters in Redmond, Wash.
One component supplier said that Microsoft had requested 1.5-inch displays. It's unclear, though, if the project will move forward.
The news would mean a re-entry by Redmond into the wearable computing realm. Microsoft, along with partners such as Fossil introduced its Smart Personal Objects Technology (SPOT) in 2004. However, the company chose to use FM radio to perform the wireless functionality, providing news headlines, scores, and instant messages to the devices.
Sales were halted in 2008. The MSN Direct service continued to support previously sold SPOT smartwatches and other devices until Dec. 31, 2011, when transmissions were shut down.
We'd expect that a new smartwatch would sport cellular technology or link via Bluetooth to a cellular device.
Although rumors about an Apple iWatch have circulated for some time, rumors began heating up earlier this year. Apple has not confirmed nor denied the rumors.
Those rumors, though, were followed by an open admission by Samsung that it was working on a smartwatch.
Google, in the meantime, is close to shipping the first developer versions of its Google Glass smartglasses will ship soon. At the same time, though, it's said that Google is working on a smartwatch, as well.