Bloomberg is reporting that HTC is, in fact, working on a smartwatch. According to the mysterious and suspect “person familiar with the matter”, HTC’s design is set to come out in the second half of 2014. The source also notes that the watch is, or will be, running Android.

In a recent interview with Financial Times, HTC CEO Peter Chou noted that wearables were “critical” to HTC, but declined to comment further on what was going on behind closed doors. He also noted they had previously worked with Microsoft on a smartwatch, but refused to mention when that was.

It’s possible that HTC had a smartwatch in development for Windows, but pulled the plug on the project. As Microsoft purchased Nokia, it may have put HTC off. Along with the licensing fee partners pay to Microsoft, HTC’s recent slump may have them more focussed on Android, and their own ecosystem.

With a recent quarterly loss, and high level executives abruptly leaving, HTC really needs a home run to survive. The One was not the flagship savior they’d hoped for, and there doesn’t seem to be much in the pipeline. An HTC smartwatch could be a knockout blow to the competition, or a death knell for the once mighty handset maker. Only time will tell.