According to latest rumors, Microsoft's smartwatch is now in hands of Surface team and will run a version of Windows 8. It could also test Ballmer's reorg vision.
Although it remains to be seen when or if Microsoft will bring a smartwatch to market, any eventual product would test the muster of Steve Ballmer's new management hierarchy.
Wearable technology is a nascent market, still typified by curiosities such as Google Glass rather than breakthrough products such as the iPad. Given that the Kickstarter-backed Pebble is arguably the smartwatch segment's poster child, it's easy to see why Microsoft, Apple and other large companies sense an opportunity.
Even so, if Microsoft releases a Surface watch, its goal will be to grow the larger Windows 8 ecosystem. For Apple, the iPod and iTunes became a gateway to iOS and, to a lesser extent, OS X. For Microsoft, a smartwatch might not need to succeed on the iPod's scale, but Ballmer no doubt hopes to mimic the strategy.
With competitors already in the background, however, Microsoft faces challenges. Android and iOS each have close to a million mobile apps that a watch might connect to. They also have legions of developers who can use their existing skills to build new apps suited for a wearable device. Whether these apps will be worthwhile is anyone's guess. But it's an advantage Microsoft doesn't have.
As a result, Julie Larson-Green will need to shepherd a product that will hit the ground running. The Windows 8 ecosystem is improving, and its progress will likely accelerate once Windows 8.1 is officially released. But on the mobile and consumer scenes, Microsoft will have to accelerate for a long time before it catches up to Apple, Google and Samsung. If Microsoft can't launch a smartwatch with more success than its poor-selling Surface tablets have had, it will only fall farther behind.
In that regard, the reported LTE support is interesting. Whereas some smartwatches must connect to a smartphone for data, the rumor suggests the Surface watch will have its own data plan. In a way, this approach could be a customer deterrent; many people already pay data bills for smartphones and tablets, so to convince consumers to add another expense, a Windows-powered smartwatch will need to be compelling.
Then again, LTE support also suggests that the watch could have standalone apps that don't require other devices. This is probably a good move. In relative terms, there aren't that many Windows Phone 8 users, after all, so if a Surface smartwatch appealed only to those with compatible phones, Microsoft would be limiting itself.
Still, in addition to appealing on its own account, the device will also need to enhance other Windows products, meaning that Larson-Green's team will have to work closely with the software teams. Tweaking Windows 8.1 for a 1.5-inch screen is no small task, and the Surface watch will only succeed if it is a compelling fusion of hardware, an engaging user interface, solid native apps and connectivity to other devices.
If Ballmer's reorg succeeds in making the company culture more collaborative and focused, the smartwatch could live up to these requirements. If not, the smartwatch could be the wearable equivalent of the Surface Pro -- interesting on paper but a niche product in practice -- or, even worse, the Zune media player.