According to Bloomberg, Apple could already be building a "smart watch" at their Cupertino campus. This comes after the New York Times and Wall Street Journal both reported that Apple was planning on making a "smart watch" — possibly called the "iWatch".
Sources revealed to Bloomberg that over 100 people are working on the watch, which "includes managers, members of the marketing group, and software and hardware engineers who previously worked on the iPhone and iPad." Another source suggested that the watch is now "beyond the experimentation phase", hinting at a 2013 release.
James Foster, Apples senior director of engineering, is also said to be working on the project. Sources revealed that the Apple Watch will "perform some of the computing tasks now handled by the iPhone and iPad." Tim Cook, Apples CEO, currently sits on the board of Nike and is reportedly very interested in wearable items, especially ones that can be used for fitness and training.
In the past, Apple has included Nike + functionality into iPods and iPhones which can track a users movement when they run, providing statistics such as calories burnt and distance run. Functionality like this is more than likely going to be built into the Apple Watch, as it will then replace the iPod lineup as a fitness companion.