A new report has claimed that the engineers at Amazon's secret hardware unit, known as Lab126, are currently busy developing new smart-home gadgets.

The report added that the unit will soon require more workers. Amazon may boost its employee base at Lab126, based in Cupertino and Sunnyvale, Calif., by at least 27 percent over the next five years, said the report.

If Amazon sticks to the plan then the number of employees at Lab 126 will reach 3,757. The division currently houses around 3,000 employees.

It is to be noted that some of Amazon's most popular hardware products, including the Kindle and Kindle Fire, were developed at this unit only. The idea of Amazon Fire Phone was also conceived and developed at this lab.

It is not clear that Lab126 employees are developing what kind of products but report claimed that Amazon is planning to develop products for the home that would connect to the Internet and provide greater user control.

The engineers at Lab126 might also be developing wearable devices, which could compete with Apple Watch and wearables released by some other companies.

Amazon declined to comment on the report. Experts however maintain that Amazon's decision to enter the smart-home industry is not illogical as two of the company's main rivals Apple and Google have already announced their plans to enter the sector quickly.

Apple has already developed HomeKit platform, which allows iOS devices to communicate with products throughout the home. On the other hand, Google acquired the smart thermostat maker Nest for $3.2 billion earlier this year, making clear its intention to expand its business in the smart home sector.