Tech giant Samsung is working on a new watch device with ‘smart’ functions, a company executive has revealed.

Lee Young Hee, executive vice president of Samsung’s mobile business, said the gadget had been in production for a long time but was very much a “future” product.

He told Bloomberg News: “We are working very hard to get ready for it. We are preparing products for the future and the watch is definitely one of them.”

No information on the ‘phone’s features or its release date have been given, but a source told Reuters news agency it would perform many of the functions of a smartphone.

The development follows speculation that Apple is also busy working on a similar watch device.

It is thought Apple’s product might include health-related functions such as a pedometer or heart rate monitor, alongside regular features like ‘phone and mapping capability.

The company has yet to officially comment, however.

With technology becoming increasingly compact, wearable gadgets are expected to become more popular in future.

Google recently showed off Glass, its hands-free glasses which use voice-activation to connect to the internet, take pictures and perform other functions.

Samsung has previously launched several ‘watch-phone’ devices which failed to catch on. However, by tapping into its recent success with Android ‘phones it could be a different story this time around.

It looks as if the two big smartphone companies are set to carry on their tit-for tat rivalry in a new sector.

Samsung overtook Apple as the world’s biggest-selling smartphone maker last year but Apple still has a slightly larger market share in the US.

The American firm is expected to update the iPhone this summer, just months after its Korean rival releases its new Galaxy 4 handset.