Yes, Microsoft apparently has a smartwatch in the works—and the device may become available sooner than you think. Quoting "sources close to the project," Forbes reports that Microsoft plans to release the wearable "within the next few weeks" and to have it in stores "soon after launch."
The company will reportedly attempt to "capture the lucrative holiday season" with the device, which is said to feature a heart-rate monitor and more than two days of battery life. Forbes' story doesn't outline specs or pricing, but it adds that Microsoft used "optical engineering expertise from its Kinect division" to develop the device.
Maybe that means motion controls will be on the menu. Now that I think about it, some sort of Leap Motion-like control scheme could be a nice alternative to touch input on a smartwatch display. I don't know where Microsoft's smartwatch handwriting recognition research fits into all this, though. Hmm.