Reportedly, the bumps in the road to retail for the iWatch, if that is what it will be called, includes problems with screen technology, battery life, and possibly manufacturing. It appears that some of the screen technology questions center less on the display and more on battery life, a key in a device so small.
Most users of mobile devices want "all-day unplugged" battery life. Depending on who you ask, that can vary from "unplug in the morning and stay alive until I plug in at night" to a mere six to eight hours of battery life in typical use. Apple has always placed a high priority on battery life in its iDevices.
The report says that Apple has a "sizable" team working on bringing its first smartwatch to market. It has been beaten to the market by rivals including Samsung (with its Galaxy Gear smartwatch), but those products have not received critical acclaim, as they have limitations -- including battery life.
Reports of an iWatch have been circulating for nearly a year. Last March, the oft-reliable Bloomberg said the device would arrive before the end of 2013. That didn't happen, but Apple is known to delay products -- or work employees to the bone -- until they get the product "just right" (see the above paragraph for a rival's semi-failure).
Still, Apple has trademarked the term "iWatch" in a number of countries. The device is expected to run a (possibly) slimmed down version of iOS.