There are very good reasons for this, while AR is supposed to be a big thing, the iPhone is dying a slow and lucrative death as any slumps are being carefully hidden.   But by 2020 Apple knows that the iPhone will be old news. Apple is unliklely to want to depend on the iPhone to boost a new product.

Word on the street is that 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.

Amusingly, anonymous sources told Bloomberg that the HTC Vive is the headset of choice for Apple’s developers. The Apple 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.

In July of this year, Tim Cook said on an earnings call that Apple's interest in AR wasn't going anywhere anytime soon. "We are high on AR for the long run. We think there are great things for customers and a great commercial opportunity."