HTC and Microsoft are two companies that have been having significant difficulty keeping up with their rivals in the smartphone industry. Now the two companies are reportedly combining forces to create a next-generation wearable technology device.

Rumors indicate that the two tech companies are working on wearable gadgets similar to those that have already been announced by other rival companies like smartwatches and smartglasses. Samsung and Sony each have smartwatch devices out while Apple is rumored to be working on a foray into the realm of wearable wrist technology all its own. Meanwhile, Google's Glass smartglasses have been in development for months.

According to The Wall Street Journal Microsoft is testing out prototypes for smartglasses that would rival Google's venture that it released last year that has been available for a limited release format since early 2013.

Microsoft has previously been reported to be working on a smartwatch that would rival all current gadgets on the market such as Sony's SmarWatch 2 as well as the rumored iWatch from Apple. Samsung recently came out with its Galaxy Gear smartwatch to augment many of the features found on its Galaxy lineup of smartphones. For example, the device can take phone calls, view texts and e-mails and play music.

New reports from Bloomberg say that HTC is also working on a smartwatch citing unnamed sources. The report indicates that the company is hoping to launch a smartwatch device by the second half of 2014. The device will run on Google's Android software and it will be able to take pictures as well as many other features also found on Samsung's Galaxy Gear and other competing smartwatches.

The L.A. Times points out that smartphone tech is still the main theater for the smartphone development war, however, wearable technology is finding its own place in the world as more and more companies begin to develop to stay competitive.