By Don Reisinger
March 20, 2017

Apple is reportedly working on new technologies that could dramatically change the way people interact with the iPhone.

The tech giant has formed a team of employees on both the hardware and software sides to deliver new augmented reality-based hardware and software services, Bloomberg is reporting on Monday, citing sources. Apple’s efforts could ultimately lead to new gadgets centering on the burgeoning technology melding the physical world with virtual elements to allow users to interact with surrounding environments in different ways.

According to Bloomberg‘s sources, Apple (AAPL) could be planning to integrate augmented reality in the iPhone sooner than later by embedding a feature in the camera, which would let users take a picture and change the depth-of-field. Users could also tilt objects in the photo. Apple might even deliver virtual elements that could be placed on a person recording a video that would move in unison with the subject.

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Augmented reality has been in the works for years, but hit its stride last summer with the release of mobile video game Pokemon Go. Players would scour locations around them to find virtual Pokemon projected over the real world. They could then capture the virtual Pokemon sitting in a tree or along a sidewalk.

Company executives, including CEO Tim Cook, have been quite vocal about their belief that augmented reality could be the next big thing in the industry. In an interview with The Independent in February, Cook drew the distinction between augmented reality and virtual reality, remarking that the latter—which places users inside a completely virtual world—could “lock [people] out from the world.” Augmented reality, he said, makes technology a part of the world. He added that augmented reality’s market opportunity is “huge” and could be as big as the iPhone.

His comments came amid lingering rumors that Apple is incorporating augmented reality in a self-driving car technology it might be developing. Apple could also be working on augmented reality glasses.

According to Bloomberg‘s sources, Apple is still working on the glasses, but likely won’t be ready to release them for quite some time. The most likely scenario, the sources say, is for Apple to embed simpler augmented reality features in upcoming iPhones, and then offer more sophisticated features in standalone devices at some point in the future.

If and when Apple joins the augmented reality race, it’ll be met with familiar faces. Both Microsoft (AAPL) and Alphabet (GOOGL) are investing heavily in augmented reality and believe wearables that let users see contextual virtual information over the real world could own a prominent place in the technology market.

Apple did not immediately respond to a Fortune request for comment on the Bloomberg report.

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