Apple is reportedly testing sleep monitoring and tracking functionality in an upcoming Apple Watch with its employees.
In 2017 Apple acquired Beddit and released an update to their product in 2018. Beddit is a Finnish technology company that makes sleep tracking devices and a sleep tracking app to help monitor sleep. It was founded in October 2006. and was acquired by Apple in May 2017.
As the sleep tracking functionality would require wearing of your Apple Watch while you sleep this would impact the battery life of the Apple Watch. Most users charge their watches overnight and as such Apple is exploring faster charging options to charge the watch quickly in the morning.
The sleep tracking functionality could be an extension of the Bedtime feature that was introduced in iOS 10. It allows you to set the amount of time that you want to sleep each night and the Clock app reminds you to go to bed and sounds an alarm to wake you up.