Apple isn't interested in the current crop of AR devices that use a phone as both the screen and the processor. The AR headset will be all inclusive, with its own screen, and an Apple-designed chip. It will also have a brand new OS, currently labeled "rOS" for "reality operating system." It's possible that users will be able to download and install apps from an AR app store, much like they do across other Apple devices. The mechanisms for launching and interacting these apps -- whether via head gestures or through Siri -- hasn't yet been decided upon, according to Bloomberg.

Because Apple doesn't yet have an augmented reality headset of its own, it's using other companies' devices to develop and test features for their new device. Anonymous sources told Bloomberg that the HTC Vive is the headset of choice for developers. The team is currently working on an AR device that will use the iPhone's screen, camera and processors, but notes that it will not be available for consumers. This will be a device for internal development only.

The emphasis on AR at Apple isn't surprising -- we've known that the company is working on a slew of augmented reality projects, including AR glasses. In July of this year, Tim Cook said on an earnings call earlier this year that Apple's interest in AR wasn't going anywhere anytime soon. "We are high on AR for the long run," he said. "We think there are great things for customers and a great commercial opportunity."