Apple is planning to debut its first in-house cellular modem chips, a device that connects phones to mobile data networks, next year in a step towards replacing Qualcomm as its supplier, according to a recent report by Bloomberg News.

The move is part of a long-term strategy of Apple to phase out reliance on Qualcomm's technology by 2027, as per the report.

Qualcomm has previously acknowledged Apple's plans to stop using its components. The two companies currently have a supply agreement that extends until at least 2026, but Qualcomm has warned investors of Apple's transition to its own technology. In the meantime, Qualcomm has been diversifying its portfolio, with a focus on laptops and AI-powered data centres, to mitigate potential declines in revenue from Apple.

Apple's new modem chips are expected to debut in the iPhone SE, the company's entry-level model, scheduled for an update in 2025. Subsequent iterations of the chips will be integrated into other devices, including flagship iPhone models, as Apple refines and advances the technology.

Apple's push into modem design dates back to 2019, when it acquired Intel's modem business for $1 billion. Last year, Apple also struck a multi-billion-dollar deal with Broadcom to develop 5G radio frequency components, potentially impacting other suppliers such as Skyworks Solutions and Qorvo.

Neither Apple nor Qualcomm has officially commented on the Bloomberg report.