Video: Does Apple need a cheaper iPhone?
Apple is working on a cordless headset that uses its own chips and supports both augmented reality (AR) and virtual reality (VR).
A source familiar with Apple's headset plans told ZDNet sister site CNET that the headset will sport two 8K displays and could be available by 2020.
Read also: 20 essential iPhone, iPad apps for college students
Apple's headset also wouldn't need to be tethered to a computer or smartphone, addressing a key problem with setting up current headsets such as Oculus and HTC's Vive, which need to be wired to other devices that power the experience.
The work is being carried out by a team of Apple engineers under the code name T288, a project uncovered in a November report by Bloomberg, which said Apple was building a new iOS-based OS called rOS or 'reality operating system'.
That same team delivered ARKit, the software development toolkit that Apple released last year for developers to build AR apps for iPhones and iPads.
According to CNET, Apple plans to use a wireless technology called 60GHz WiGig, an emerging wireless standard for super-fast networking. Also, users won't need to install base stations in a room to detect their location.
The headset will reportedly be powered by a five-nanometer processor, a more powerful system than the iPhone X's 10-nanometer processor. The chip being targeted for the T288 AR/VR device would also be used as a reference design for the chips Apple wants to us in future Mac computers in place of Intel chips.
Read also: Apple fails to lead on wireless charging, again
Apple is aiming high for the resolution of its AR/VR headset screens given that 8K TVs from Samsung and LG have only been demoed at trade shows but aren't yet sold.
Apple is probably hoping to repeat the success of the iPhone and Apple Watch, two late-comers to the first smartphone and smartwatch industries that now take most of the profits.
New iPhones and more: Here's what's coming from Apple this year
Previous and related coverage
Apple's working on a powerful, wireless headset for both AR, VR CNET
The headset, which would straddle the two technologies and tap into Apple's own chips, is slated for 2020. It's the biggest sign of Apple's interest in virtual reality.
Apple reportedly acquires AR startup Vrvana
The Montreal-based startup produced the Totem AR/VR headset, which never shipped.
WWDC 2017: Apple launches augmented reality developer tools with ARKit
Apple is betting that ARKit can be the "largest AR platform in the world" in short order.
Apple previews ARKit apps, Google debuts ARCore: It's all about business, developers
Augmented reality is likely to become a key cog in digital transformation efforts. Cue the race between Apple and Google.