Apple and Intel rumored to be developing an iWatch for 2013

Apple and Intel are rumored to be working on a smartwatch that could be ready for production sometime in the first half of 2013. Some elements of this rumor do make sense from a business standpoint but others seem a bit too far-fetched to fall into the plausible category.
According to German blog Mobile Geeks by way of a Chinese site, the two companies are building a watch with a 1.5-inch PMOLED display created by RiTDisplays. The watch face will feature ITO-coated glass while the watch itself will connect to other devices using low-power Bluetooth 4.0.

If you recall, Apple’s old iPod nano gained a significant following due to the fact that it could be used as a watch when paired with one of many compatible watch bands and lest we forget the Pebble customizable watch from Kickstarter. The fact that Apple recently redesigned the nano could be a clue that an iWatch may be in the pipeline.
The confusing part of this rumor, however, is Intel’s involvement. Apple has been keen on decreasing dependence on outside help as of late, especially with regards to processor development. An iWatch wouldn’t need a powerful processor as CPU-intensive tasks could be remotely performed on the paired device instead.
Smartwatches have gained a tiny bit of traction as of late but they’re by no means mainstream at this point. If you aren’t familiar with the concept, a smartwatch can connect to your smartphone, laptop or tablet and allow you to do things like read a text message or control music directly from your wrist without having to pull out your device.
Do you think smartwatches will eventually catch on with mainstream consumers or are they simply a passing fad that nobody will think twice about in a year or two?