A new report from Bloomberg says Apple demonstrated its board of directors a mixed reality headset capable of both augmented and virtual reality last week and has engineers working on an operating system for the gadget.

The headset is said to mix augmented and virtual reality components. Apple's first new product since the Apple Watch in 2015 would be the headset.

According to Bloomberg, Apple has also accelerated development of its reality operating system, which will operate on the headset.

Apple intends to reveal the headset towards the end of this year or early next year. People may be able to purchase the headset by 2023. According to analyst Ming-Chi Kuo, Apple's "goal is to replace the ‌iPhone‌ with AR in 10 years."

It also seems logical that Apple would wait until the hardware is near to completion before investing heavily in software development so that it knows what features and software to build.

The report cites that Apple has "accelerated development" of "Reality OS," or rOS, the operating system for the headset. Another reason a software update could imply the device is nearing completion is that it's simpler for software hints and traces to slip out before an announcement.

rOS had already been mentioned in early iOS 13 beta releases, as well as in logs.

This device has been under development for quite some time. According to The Information, Apple board members were given the opportunity to experience a few prototype AR/VR devices in 2016.

The report does make it clear that these were very early-stage devices (some were supposedly modified HTC Vives, and one even featured a crane to keep the headset's weight off the board members' necks), created primarily to serve as a proof of concept and to secure funding for the project.

Given Bloomberg's story that the headset's consumer release is slated for late this year or in 2023, the prototype shown off recently was most likely considerably closer to completion.

According to leaks, it will be capable of both entirely immersing you in virtual content and of adding virtual components to the real world, most likely via a pass-through video stream.

Another Bloomberg article from last year said that Apple has internal conflicts about its AR and VR plans. According to the article, Apple may take a split strategy, in which it develops a VR headset first and then an AR smart glass later.