Microsoft is working on a touch screen smartwatch, reports Wall Street Journal. The Redmond giant contacted the Asian suppliers for components to make a smartwatch, including a 1.5-inch touch display. Although, it is not clear whether the company decided to actually introduce it on the market or not. The Journal claims to have learnt from anonymous sources within the Asian supply chain.

WSJ writes, “One executive said he met with Microsoft’s research and development team at the software company’s Redmond, Wash., headquarters. But it’s unclear whether Microsoft will opt to move ahead with the watch.”

Microsoft would also be a part of the future wearable market electronics and would be joining the Apple, Google, Samsung and others who have been already working on such kind of projects. Gartner predicts that this market segment will generate $10 billion by 2016 and hence we would see a growing supply/demand for wearable gadgets shortly.

However, Microsoft is not betting for the first time on wearable gadget. A decade ago, the giant surprised everyone with a smart watch powered by its own operating system. The smartwatch user could have new headlines, sports scores and instant messages over FM radio, but it could not last long and stopped in 2008.

With the development of the first Surface tablet, Microsoft rebooted in the hardware business, and the company would like to strengthen its presence with a new rumored 7-inch tablet, as well as its own smartphone. If this rumor is to believed, these products could join a smartwatch also, but we have to wait sometime more to know for sure if the team of Steve Ballmer decides to market the gadget or not.