The new phone will look similar to HTC's current flagship One phone, which is one of the best Android phones available.
The smartwatch will be focused on fitness, thanks to a new partnership HTC now has with Under Armour, according to the report. HTC and Under Armour announced their partnership a few weeks ago.
The phone will also have a 20 megapixel camera, which is much higher than the standard 8 or 12 megapixels used in high-end phones today.
As HTC's smartphone sales continue to struggle, the company is looking for new product categories. One key area will be smart appliances, similar to what Google's Nest division makes with its thermostats and smoke detectors, Business Insider has learned.
HTC is planning to launch at least one "smart appliance" later this year, but probably not at the same time as the new watch and phone.