AAPL Apple Inc

By Daisuke Wakabayashi and Jack Nicas 

Apple Inc. is accelerating its efforts in augmented and virtual reality, hiring industry experts and recently acquiring a startup specializing in image recognition.

The acquisition of New York-based Flyby Media is the latest in a series of deals to bolster Apple's long-running interest in augmented and virtual reality. Apple's team investigating the technologies has grown to more than 100 people, according to people familiar with the company.

Flyby Media provided the image-recognition software for Google's Project Tango--an effort to use a smartphone's sensors and cameras to create a kind of three-dimensional map of a user's surroundings.

An Apple spokeswoman confirmed it had acquired Flyby Media with the company's standard statement after an acquisition, saying it "buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans." She declined to elaborate on the deal terms, or Apple's interest in virtual or augmented reality.

The Financial Times earlier reported the acquisition and Apple's push into augmented reality and virtual reality. The FT reported Apple has been building prototypes of possible headset configurations. Apple regularly builds prototypes of potential products it ultimately decides not to make.

Virtual reality uses headsets and headphones to immerse users in experiences that appear to be all around them. Augmented, or mixed, reality displays digital objects in users' view of the physical world--typically via headsets but also via smartphones or tablets--much like the yellow first-down line on football broadcasts.

The people familiar with the matter said Apple has investigated augmented reality and virtual reality technology for more than a decade. The company is built on selling devices that access the digital world--from the Apple II personal computer to the iPhone. Many technology executives and investors see virtual- and mixed-reality headsets as the next such devices.

On a Tuesday call with analysts, Apple Chief Executive Tim Cook was asked whether he considered virtual reality a mainstream technology or a geeky niche. "I don't think it's a niche," Mr. Cook said. "It's really cool and has some interesting applications."

In May, Apple said it had acquired Metaio, a German augmented-reality firm working on technology to make any real-world surface a touch screen. In November, it confirmed the acquisition of Faceshift, a startup that captures facial expressions and turns them into digital avatars. The company also hired Doug Bowman, a computer-science professor at Virginia Tech who is considered a leading researcher in virtual reality and augmented reality.

Others are experimenting with virtual and mixed reality using smartphones, including Apple's iPhone. Chinese Internet search giant Baidu Inc., for instance, offers applications that let users point smartphones at certain real objects, such as a 100-yuan bill or a milk carton, to activate digital messages or animations over the objects on their screens.

Such applications are expected to increase as smartphones come equipped with more cameras, enabling them to effectively see in three dimensions. New phones from Lenovo Group Ltd., developed under a partnership with Alphabet Inc.'s Google, allow users to point the phones at their kitchens to see how new appliances would look in the room.

Google and another big Apple rival, Samsung Electronics Co., sell lower-end headsets that use smartphones as screens. Google's $20 cardboard headsets function with iPhones, and there are now hundreds of virtual-reality apps in Apple's app store.

Advances in sensors, software and computer chips have recently made virtual reality commercially viable, leading to the surge of activity in the technology. But mixed reality remains much harder to achieve because the devices must constantly interpret the physical world.

Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

January 29, 2016 17:58 ET (22:58 GMT)

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