Word from Financial Times is that Apple is on a hiring spree to solve "iWatch" design issues.
"According to the report, Apple is "aggressively" hiring engineering talent, which could mean that the iWatch project is real and not just an endless string of rumors. However, being an entire new product category, the iWatch reportedly poses "hard engineering problems," which Apple is now trying to solve. There are now several dozen employees dedicated to the device's development."
Concerned that they may be left behind, companies such as Google, LG and Samsung are rumored to be working on a smartwatch. Sony is a bit ahead of the game and have recently released a second version of it's Android-powered Smartwatch.