Details are limited, rather that the iPhone users will be able to share data so they could see the same virtual object in the same space via their individual devices, Reuters reports. Due to privacy concerns, users' personal data will not be sent to Apple's servers, the report added.
Augmented reality (AR) allows viewers to see virtual structures superimposed on their surroundings via their smartphones or other devices. It is the technology used in mobile game Pokemon Go.
Apple declined to comment.
Previous reports suggested that Apple's version 2.0 of the ARKit augmented reality tools will support a new mode that would let users play AR games against each other in the same virtual environment.
Apple and rival Google are racing to release AR tools to attract software developers to their platforms.
Google has also announced AR features for Android, but requires scans of a player's environment to be sent to, and stored in, the cloud. Announced at Google's developer conference in May, the Cloud Anchors requires the first player to scan his or her environment and then upload the raw mapping data to Google's servers, where it is translated into a rough representation of the area.
The subsequent players perform a scan that sends more limited information to the same server, which matches the phones up and lets them each see the same virtual object on the same physical space.