There has been rumors that Nokia is working on Android devices and was true until a Chinese site CTechnology unveiled some unique info which are, somehow, not so good.
This master work was under the supervision of Peter Skillman, former VP of MeeGo UX and services design and current head of design for HERE.Summarizing the whole scenario, Peter Skillman was the only for the job to be done perfectly.Peter was reportedly working on several Android devices including a 7 inch tablet with Qualcomm SnapDragon 400 in it.
All these works were taking place off the track, with no influence of any out source not even Microsoft.Nokia couldn't sell any Nokia brand phone for two years.
Enclosing everything, Nokia has to do something for its survival now so as a result, Nokia is working on flexible displays, wireless power transmission and electromagnetic energy generation will be its corners of saving its Ryan.A smartwatch may not be the part of development as this project have already been transferred to Microsoft.
All the above discussed dilemma is not yet confirmed so take it as a rumor.