To date there have been at least two patents filed by Google regarding smartwatch designs, so there's no question that something is in the works, even if it's only on paper. However sources claim that an actual physical product is making rounds internally, showing up in at least three different Google offices: Berlin, Manchester and Mountain View.
According to unnamed sources, rumors of a Google smartwatch began to appear after the device made an appearance in "rough form" at the Berlin and Manchester offices. The device then showed its face again just recently at the Mountain View campus. It's expected to be released "sometime soon".
The most recent patent is presumed to be an alternative to Google Glass for those who would rather not have information dumped into their field of view. One source confirms that theory, stating that "functionality will be very much like Glass" although presumably without the camera. As seen in the recent patent, the interface will rely on Google Now-type cards – swipes to the left will tell the user what is coming up. Information will be pulled from a tethered smartphone.
The source also states that Motorola will manufacture the smartwatch. Android Authority points out that Motorola has already started this journey with the MOTOACTV, a wearable gadget tailored to fitness training. It sports a TI OMAP3630 SoC clocked at 600 MHz, 256 MB of RAM, 8 GB of internal storage, Wireless N and Bluetooth 4 connectivity, and a 1.6-inch capacitive multitouch LDC display (220 x 176).
"[The MOTOACTV Android app from Google Play] allows your Android smartphone to communicate with you through your MOTOACTV device and headphones," Motorola states. "When your phone is within Bluetooth range, you can answer calls and receive text messages. Just as cool, the app syncs up with your MOTOACTV.com data so you can analyze your info and manage your fitness plan on your phone and on the run."
With experience already under its belt, it makes sense that Motorola would be the OEM of choice for Google's smartwatch. The MOTOACTIV sells for around $260 USD on Amazon and includes the device, a sports wrist strap, a wall charger, stereo heaphones with a mic, a belt clip and a USB cable. The OS of choice is likely Android.