Several big stories broke last year about Apple developing their own cellular modem (01, 02 and 03) with the latter report claiming that the chip could make its debut in an iPhone in late 2022.  

Flash forwarding to yesterday, Apple's CEO Tim Cook held a virtual meeting and during that session Johny Srouji provided some interesting insights into the company's advances in developing their own cellular modem. The comment surprised the market and dinged Qualomm's stock by 6.3% in extended trading, though it's recovered some overnight.  Qualcomm gets about 11% of its revenue from Apple.

Srouji announced that "This year, we kicked off the development of our first internal cellular modem which will enable another key strategic transition. Long-term strategic investments like these are a critical part of enabling our products and making sure we have a rich pipeline of innovative technologies for our future."

Srouji said the $1 billion acquisition of Intel Corp.’s modem business in 2019 helped Apple build a team of hardware and software engineers to develop its own cellular modem.

Apple has been hiring engineers from Qualcomm for years to help it build the modem, and has offices focused on the effort in San Diego, at its Cupertino, California headquarters and in Europe. For more on this, read the full Bloomberg report.

Considering what Srouji's team delivered for Apple's first M1 chips for Macs, one could only imagine what Apple's first cellular modem will be able to deliver. While the market instantly reacted to Srouji's news, I'm sure that Android OEMs may be concerned as well should the modem dance circles around Qualcomm's cellular modems.