If the reports are true, it would be joining the likes of Apple, Samsung, Google, and others looking to capitalize on a forecasted boom in wearable electronics.
Microsoft has so far refused to comment on the rumors.
This wouldn't be
Microsoft's first shot at making a smartwatch. Back in 2004 it fielded a
product under the name SPOT that used FM radio signals to send instant
messages from Windows Messenger, news headlines, stock information, and
weather forecasts as part of a paid subscription service.
Check e-mails on your watch
But production stopped in 2008, and the SPOT (Smart Personal Object Technology) project was finally canceled last year.
Interestingly, Microsoft researcher Bill Buxton spoke at length on the 37-year history of smartwatches last month, possibly foreshadowing a return to the market.
The news comes days after a bleak report from IDC
last week claiming that Q1 2013 marked the steepest decline ever for
the PC industry, down 13.9 percent over Q1 2012, a trend that apparently
accelerated rather than slowed with the release of Windows 8.
It's also the second
significant leak in the report's aftermath — last week The Journal
reported that Redmond was also working on a 7-inch Surface tablet due later this year.