According to a published report that cites a tip, the watch is expected to be ready for the second half of next year, and will remain with Nokia instead of moving to Redmond when Microsoft closes on its purchase of Nokia's Devices and Services division. The report goes on to say that the head of Emerging Devices, Axel Meyer, and Peter Skillman are working together on the project which is said to employ Nokia Kinetic technology. This allows the user to bend and squeeze a device.
The tip adds that the watch will also feature Nokia's Morph technology. Nokia describes this as "nanoscale technologies that will potentially create a world of radically different devices that open up an entirely new spectrum of possibilities". Now we don't for one second believe that the Morph technology similar to the one in the video below, will be available in the near future, but it does sound like Nokia might have something different to offer next year. We caution you though, to take this kind of report with more than your usual grain of salt until we hear from the Finnish based OEM itself.
Meanwhile, you can check out the videos below and in the words of the Everly Brothers, "Dream".
source: AlexanderBudde, Nokia, NokiaPowerUser via WMPoweruser