Speaking to people "familiar with the situation," Bloomberg reports that Apple is indeed hard at work developing a headset, and that it has ambitious plans to have one ready to ship to customers by 2020. Apple's ARKit software that it showcased with impressive demos on stage earlier this year is reportedly an "interim step" to enable its stable of hundreds of AR developers to test new tech on an existing device while the headset and hardware are being engineered. That AR team is also apparently using existing third-party virtual reality headsets like the HTC Vive to run tests, too.
As for the physical headset device itself, Bloomberg's sources claim it will run on a proprietary all-new chip and operating system that's similar to the one built into the Apple Watch. Details are vague as for how a user will operate the headset or what it will look like, but the team is "investigating touch panels, voice-activation via Siri and head gestures," according to the report. As for what you might use it for, the company is evidently focused on incorporating AR functionality into everything from maps to texting, building out virtual meeting spaces, 360-video playback, and lots more.