The Cupertino, Calif.-based technology company has been working for the past year to split up its wireless router unit, and has begun to move engineers from the business into other segments including the Apple TV team, the sources noted.
Apple hasn't offered a refresh for its routers since 2013. The company debuted the product in 1999 and currently sells three versions: the AirPort Express for $99, AirPort Extreme for $199 and AirPort Time capsule for $299. Breaking up the router team signals that Apple won't be making any new versions of these products, Bloomberg said.
The router offerings, as well as Apple Watch, Apple TV and several other products, make up Apple's "other products" segment. "Other products" generated $11.1 billion in revenue for the fiscal year 2016 ending in September, while the company generated a total of $215.64 billion in revenue for the year.
Apple's reported move out of the business comes as Oppenheimer & Co. analysts on Monday downgraded Apple, suggesting the company may be lacking innovation over the next several years.
"I wanted [Apple] to buy Harman International (HAR) - I've wanted them to buy so many different things," said Jim Cramer TheStreet's founder and manager of the Action Alerts PLUS portfolio, which owns AAPL. "Apple is spending a lot on R&D and I don't think that they are being idle."
While Apple is pulling out of some hardware business, Mountain View, Calif.-based Alphabet (GOOGL) is actually stepping up its hardware investments. The Google parent launched its first router offering in 2015 and revealed a new router device called Google WiFi during its October keynote event this fall. The company began taking orders in November for the new router, which costs $129 a pop, and shipments will begin in December.