Another new patent received by Microsoft is for Dynamic User Interfaces Adapted to Inferred User Contexts. Using sensors like accelerometers, microphones and GPS, a device can tell if a user is sitting, driving, jogging, or doing some other activity. Different UI displays would appear on a device, depending on the activity detected by the sensors.
A few years ago, it was determined that Microsoft was ironically making more money selling licenses for Android phones, than it was making from selling the Windows Phone OS. Back in 2012, the numbers that were bandied about showed Microsoft making nearly $800 million from royalty payments sent to the company by HTC and Samsung in the second quarter of that year. The crew at Redmond were getting $10 from HTC for each Android model sold by the latter. For each Samsung branded Android phone sold, Microsoft allegedly received $12-$13. Consider that at thew time, Nokia was paying Microsoft $20 for each Windows Phone model it sold, and you could easily see where Microsoft's allegiances laid at the time.
Since then, Android sales have continued to explode. It is possible that Microsoft still makes more money cashing in those royalty checks than from selling Windows Phone handsets. The acquisition of Nokia's Devices and Services unit changes things, since there will be no more licensing deals with Nokia. On the other hand Microsoft gets to keep all of the profits it makes from selling the handsets.
Microsoft might enjoy the idea of sitting back and collecting royalty checks while others do the heavy lifting (like manufacturing and marketing). After all, the template served them well with smartphones. That doesn't mean that Microsoft won't produce a smartwatch of its own. In fact, recently someone said that he spoke to a person in New York City who allegedly was testing a Microsoft watch. Even if such a watch is developed, Redmond's real focus might be on the smartwatches made by those who require Microsoft's patents to build them,.
Microsoft is collecting patents on smartwatches
1. Smartwatch receives images wirelessly from a smartphone
2. User Interface changes depending on what activity the sensors determine is being done by the user
source: USPTO (1), (2) via WMPoweruser