Cupertino tech giant also set to debut wireless charging for its iPhones and iPads by 2017
Apple Inc has assembled a large team of experts in virtual and augmented reality and built prototypes of headsets that could one day rival Facebook's Oculus Rift or Microsoft's Hololens, the Financial Times reported.
A secret research unit, housing hundreds of staff assembled from acquisitions or poached from other companies, is working on next-generation headset technologies, the FT reported, citing people familiar with the initiative.
The newspaper had previously reported the hiring of leading virtual reality researcher Doug Bowman by the iPhone maker. Apple was not immediately available to comment.
Meanwhile, Apple is finally set to introduce wireless charging for its iPhones and iPads by 2017, with rumours citing it will be a new feature for the iPhone 7.
Wireless charging is not new, as Samsung, Sony and Google have already released wireless charging for its smartphone which require proximity to a charging plate. Apple, however, is working with partners in the US and Asia to take wireless charging one step further, by exploring technologies which could potentially charge Apple's smart devices from a distance.
The development aims to overcome technical hurdles, such as loss of power over distance. Furthermore, last week Apple announced its financial earnings and revealed though its devices generate most of its revenue, sales have declined. If Apple is able to integrate this technology, it could give the iPhone giant an advantage over other smartphones.
Earlier this year, analysts at IHS Technology revealed its wireless power predictions for 2016, and noted the iPhone 7 will launch with integrated wireless charging.
David Green, research manager at IHS Technology said: "We still expect [wireless charging with the iPhone 7], but this latest rumour suggests a longer term look at much greater spatial freedom, claiming to take away the charging pad altogether."