What does Xbox running the smartwatch show mean for the Windows phone group?

Will Bill be wearing a new watch soon?

Will Bill be wearing a new watch soon?

The Verge has a story which seems to add a little more weight to the Microsoft smartwatch rumors.

While the story doesn’t seem to have much new information, it does point to the Xbox group as the potential center of gravity for a Microsoft smartwatch. This makes sense, since after all the Xbox group has been where much of the consumer digital media action has been coming from in recent years, but what is more interesting is the group which is apparently not running the smartwatch show: Windows Phone.

Now my understanding is Microsoft’s business units are working more closely now across dotted lines, and the company is trying hard to eliminate duplicate efforts (Zune anyone?), but if the Xbox group (or Interactive Entertainment group,  as the division is called) is indeed running the smartwatch show, I have to wonder what that means for Windows Phone.

After all, my initial guess would have been that a Microsoft smartwatch would have ran a modified version of Windows Phone (likely Windows Phone Blue, the next version of Windows Phone), but Xbox controlling the smartwatch would have to call this into question a bit.

It also makes you wonder if the Microsoft smartwatch will be more focused on entertainment than communication.  Now, as I said, the company is working hard to better reduce duplicative work across divisions, but if the successor to the SPOT watch was going to be a true Dick Tracy watch, I’d have thought it would have been focused around digital communications, which would have (or so I would have thought) Windows Phone calling the shots.

Once again, these are all just rumors at this point, so we’ll have to wait and see just what the successor to SPOT looks like. Ine the end, a Microsoft smartwatch may get its own division if Microsoft can move quickly enough to make a go of it.