SAN FRANCISCO: Tech giant Apple has reportedly built a specialist research unit that is concentrating on augmented and virtual reality projects as the company seeks to make future revenue less dependent on iPhone sales.

According to sources who spoke to the Financial Times, the "secret" research unit numbers hundreds of experts inherited from a series of acquisitions.

Additional staff poached from Microsoft and other high-tech companies that have been developing next-generation headsets are also working on Apple prototypes, it is reported.

Rivals such as Google, Microsoft and Facebook are already actively engaged in developing augmented and virtual reality products, such as Facebook's Oculus Rift VR headset, and news of Apple's discreet research wing suggests it plans to ramp up its challenge.

Virtual reality immerses users into experiences via their headsets or headphones while augmented reality displays digital objects on to users' view of the physical world, either via a headset or a mobile device.

While Apple would not comment on the initiative, it did confirm that it had recently acquired Flyby Media, a New York-based augmented reality start-up which developed technology allowing mobile devices to "see" the world around them.

Significantly, Flyby was the vision software partner chosen by Google to help it develop its Project Tango 3D image-recognition technology.

Long recognised for its innovation, Apple has experimented with virtual reality headsets in the past, but it appears with its growing research unit and selective acquisitions that it is taking the technology more seriously.

As Apple chief executive Tim Cook said last week, "I don't think it's a niche. It is really cool and has some interesting applications."

Data sourced from Financial Times; additional content by Warc staff