Apple reportedly has 1,000 engineers working on augmented reality and could implement the technology in the upcoming iPhone 8 (iPhone X), a research note by analyst Steven Milunovich and his team at UBS obtained by Business Insider revealed.

In the memo, Milunovich pointed out Apple CEO Tim Cook has repeatedly "broken the silence on future products with regards to AR," and included various comments Cook has made about AR in the past.

"According to some industry sources, the company may have over 1,000 engineers working on a project in Israel that could be related to AR," the note said.

The 10th anniversary iPhone could come with AR like "moderate 3D mapping ... and possibly an AR software development kit," the note revealed.

The Cupertino company has made numerous AR-associated acquisitions, including Prime Sense, a 3D sensing company based in Tel Aviv; German AR company Metaio, which created software that lets users look at products and then apply different colors and outcomes; and RealFace, a Tel Aviv company that focuses on facial recognition.

Apple also allegedly teamed up with German optics company Carl Zeiss to work on a pair of AR smart glasses, according to popular blogger Robert Scoble. A Zeiss employee allegedly confirmed the partnership during CES 2017 last month. The AR glasses could be announced as soon as this year, according to Scoble.

Apple Prefers AR Over VR

In the note, Milunovich said Apple seems to be more interested in AR rather than virtual reality because augmented reality connects people in contrast to VR, which isolates users’ experience involving a headset.

Cook had previously said he preferred augmented reality in an interview with ABC’s Good Morning America in September 2016. He said he preferred AR over VR, because it allows people to be more "present."

"There's virtual reality and there's augmented reality -- both of these are incredibly interesting," Cook said in the interview. "But my own view is that augmented reality is the larger of the two, probably by far."

AR apps, which lets users hold up their device with images superimposed onto the real-world view seen through the camera screen, could help Apple thrive, according to Milunovich. Apple can implement AR technology through its current iPhones and iPads, since they already have the hardware in place.

Apple is expected to release three new iPhones this September, a 4.7-inch model, a 5.5-inch and a 5.8-inch version.