Apple has a team of about 100 product designers working on a wristwatch-like device that may perform some of the computing tasks now handled by the iPhone and iPad, two people familiar with the company's plans said.
The team, which has grown in the past year, includes managers, members of the marketing group and software and hardware engineers who previously worked on the iPhone and iPad, said the people, who asked not to be named because the plans are private. The team's size suggests Apple is beyond the experimentation phase in its development, said the people.
Apple chief executive Tim Cook is facing pressure from shareholders who have seen the stock slump more than 30 per cent since a September high amid slowing sales growth and competition from rivals such as Samsung. Without a revolutionary new gadget that commands a higher price, investors are pushing for Apple to return more cash.
"The iWatch will fill a gaping hole in the Apple ecosystem," Bruce Tognazzini, a technology consultant and former Apple employee, wrote in a blog post last week. "Like other breakthrough Apple products, its value will be underestimated at launch, then grow to have a profound impact on our lives and Apple's fortunes."
Apple's James Foster, the senior director of engineering, and Achim Pantfoerder, another manager, are part of the efforts to introduce a wristwatch-style computer, according to the people. Apple has worked on wearable devices for tracking fitness in the past, but never brought them to market, said one of the people.
Creating a watch creates unique challenges, particularly managing power demands so that the battery does not need to be recharged every day. Google has been working on eyeglass-embedded computers and plans to introduce them in 2014.
The introduction of a wearable computing device may signal a new direction for the consumer-electronics industry. Apple's debut of the iPhone in 2007 and iPad in 2010 created the market for touchscreen smartphones and tablet computers that have been followed by companies such as Google, Samsung and Microsoft.
Apple is right to invest in products such as watches, even if they don't result in commercial products, said Josh Spencer, a fund manager at T Rowe Price Group.
"There's more people that would wear an Apple watch than would wear Google glasses," Mr Spencer said.
Wearable machines for tracking fitness are already on the market from Nike, Fitbit and other manufacturers.
* Bloomberg News