According to Taiwan-based portal DigiTimes that cited people familiar with the situation, the Apple team working on the AR/VR project has been temporarily disbanded and "reassigned to other product lines".
"Supply chain-related companies said that Apple is adjusting R&D resources, and the development team for AR/VR headsets has been disbanded and transferred to other product lines," claimed the report.
It suggests that the discontinuation of the AR project happened after Microsoft HoloLens co-creator Avi Bar-Zeev left as Apple's AR headset development team in January.
Several reports in the past have claimed that the iPhone maker is serious about launching AR glasses as early as 2020, including the Apple famed analyst Ming-Chi Kuo.
Apple's launch of ARkit for iOS developers has been seen as a big step for the company to enter the AR industry.
"Apple's temporary termination of hardware development of AR/VR headsets does not mean that it is not optimistic about the prospects of AR/VR," said the report, adding that the timing may not be ripe at this stage.
Apple CEO Tim Cook has always been bullish on AR.
"AR and ML will be key to delivering the right information to the right person at the right time," Cook said recently as he announced expanded partnership with SAP.
In the new update, Apple ARKit, the company's AR development platform which could only recognise horizontal surfaces while placing virtual objects, gets support to identify vertical objects.
"ARKit can now recognise and place virtual objects on vertical surfaces. Using advanced computer vision techniques to find and recognise the position of 2D images ARKit can integrate these real world images into AR experiences," the Cupertino-based giant said.
ARKit 3, RealityKit and the Reality Composer are other advanced tools designed by Apple to make it even easier for developers to create compelling AR experiences for consumer and business apps.
( With inputs from IANS )