Now that Broadcom (UNKNOWN:BRCM.DL) has finally thrown in the towel on its cellular business after years of failing to succeed, the company is trying to shop around the division. The company's management team claims that the product pipeline that was under development had significant technical merit, but that the economics of running that business just couldn't support a $700 million-a-year operating expense run rate. That said, if Broadcom can successfully shop the business, Apple (NASDAQ:AAPL) seems the most likely buyer.

Taking back control from Qualcomm
Today, Qualcomm (NASDAQ:QCOM) is the world's leading cellular baseband development shop and holds the majority of the market. Qualcomm also happens to supply standalone cellular chips to Apple for the latter's renowned iPhone and iPad product lines. While Qualcomm has been more or less the only choice for a leading-edge LTE baseband for several years, it would have been beneficial to Apple to have more than one supplier in the running -- at the very least to keep prices under control.

However, with Broadcom bowing out of the race as a high-end baseband vendor, Apple's only two choices appear to be Qualcomm and -- if it can consistently execute to its cellular baseband roadmap -- Intel (NASDAQ:INTC). With very few viable suppliers in the market, Apple will either be forced to stay a step behind the latest and greatest in terms of modem technology (taking advantage of the lower prices of more mature technology) or it suffers margin compression as it tries to adopt leading-edge features.

That said, what if Apple could take control of its own cellular destiny by picking up where Broadcom left off?

It's not as easy as it sounds
There's a reason Qualcomm enjoys the dominant position it does today -- its technology benefits from multiple years of targeted investments, as well as a deep involvement with the development of key wireless standards and technologies. As competitive as Broadcom claimed its product pipeline to be, the odds are good that Qualcomm's solutions were superior. If Broadcom's products truly were better, it would have been able to win a couple of SKUs of a future-generation iPhone and the shutdown wouldn't have been necessary.

So, if Apple were to pick up Broadcom's cellular business, it would incur several hundred million dollars' worth of incremental operating expenses. That said, it's important to note that Apple's incremental operating expenses (because it already develops world-class mobile SoCs and just needs the modem piece, and not the marketing staff that a merchant chip vendor like Broadcom needs) would probably be lower than the $700 million a year that Broadcom had to shell out. Of course, it is unclear if what Broadcom had been spending on modem development was enough to be competitive with Qualcomm.

If Apple didn't like Renesas Mobile, it probably won't like Broadcom cellular
The one thing that makes it tough to believe that Apple would actually pick up these assets -- even though they would fill the last significant gap in the company's silicon capabilities -- is that Apple had its chance to buy numerous of these players that have exited mobile. For instance, if Apple really wanted to get in on basebands, it would have used its large cash hoard to pick up the Renesas Mobile team that Broadcom grabbed for $164 million to get its modems back on track. It's tough to believe that Broadcom added enough value over the past nine months to materially influence the value of this business to Apple.

Foolish bottom line
While it would certainly be interesting to see Apple become a world-class modem development house, Apple really would need to have confidence that it could develop a solution that's better on balance than what Qualcomm provides as a discrete solution. While with enough money and time, Apple could prove competitive, it's unclear if the benefits of doing so outweigh the very high development costs and fairly low probability of near- to medium-term success.