Amazon's secret hardware division, Lab126, is reportedly working on new smart-home devices as well as a smart watch to compete with Apple's new Apple Watch.

Amazon will also apparently be boosting the number of employees at Lab126 by at least 27 percent over the next five years. Currently, Lab126 has around 3,000 employees and if the plan follows through it will have 3,757 by 2019.

Lab126 is known as the starting point for a number of Amazon's most popular products, including the Kindle and Kindle Fire. The recent Amazon Fire Phone was also developed at the lab.

The lab's new projects, however, are a little more experimental in fields that are not yet fully developed, such as smart homes and smart watches. Details about exactly what the projects entail have not yet been announced, although reports suggest that the smart home products that Amazon cooks up will be very connected to the Internet.

Amazon's hardware products are normally released in an attempt to point users toward Amazon's online store. It will be interesting to see how smart home gadgets could help users shop online, or if Amazon will completely change its business model.

The team at Lab126 is reportedly already testing products that allow users to order products such as detergent with only the push of a button. These products could even know what the user needs before they need it.

"If I walk into my laundry room and there's a big pool of water and the floor needs to be replaced, I'd love to know about it two weeks before it happens," said Ryo Koyama, CEO of Weaved, a cloud services and Internet of Things startup networking company that provides TCP-level remote access for connected homes.

If reports about what Amazon is working on turn out to be true, then the company is only slightly behind companies like Google and Apple in terms of smart home development. Apple is currently working on its HomeKit platform, although the company is still developing the idea into something that could be widely adopted. Google acquired Nest earlier this year for $3.2 billion, although the home automation company is still relatively new to the smart home market.

Amazon is also reportedly working on wearable devices that could take on the likes of the Apple Watch and Android Wear devices.

Not too many details are available about the company's exploration into wearable technology, but it is likely that it will also be strongly connected to Amazon's online store and allow users to buy items on the fly.

Amazon's new hardware products could prove to be very popular, although Amazon's Fire Phone is largely considered to be a flop.

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