Intel’s newly retired CEO Paul Otellini is, understandably, in reflective mood, and in an interview, he has identified the failure to get its chips into the iPhone as the defining failure of his reign.
That must have been particularly painful because one of the great moments of Otellini’s early period as CEO was to get Intel processors into the PowerPC-based Mac line, and he was credited with building a very closer relationship with the OEM, spreading his wings beyond the Wintel alliance.
But for the iPhone, Apple went with ARM-based chips, first from Samsung and then its own designs ‘ and since it adopted the same architecture for the iPad, that was an important expansion for the ARM platform into larger-screened ‘post-PC’ products.
Otellini told The Atlantic he “decided against doing what it took” to make the chips for the iPhone. ‘We ended up not winning it or passing on it, depending on how you want to view it,’ he told the paper. ‘And the world would have been a lot different if we’d done it. The thing you have to remember is that this was before the iPhone was introduced and no one knew what the iPhone would do.’
He said Apple was interested in an Intel chip but was not prepared to pay the price Intel wanted, and though Otellini insisted ‘my gut told me to say yes’, he admitted he failed to see that the iPhone volumes would justify the lower price. ‘In hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought,’ he summed up.
Getting the iPhone slot, at a time when handsets were only just starting to incorporate fully blow applications processor, would have transformed Intel’s position in the mobile market.
It is not clear which chip formed the center of the negotiations with Apple in 2006-7. In early 2007, before the first iPhone launch, there were many reports that the handset would incorporate the XScale architecture, which had been Intel’s ARM-based mobile platform. It had sold that to Marvell in 2006 and decided to develop an x86-based mobile line, Atom. That decision, while it gave Intel a single architecture and the control of using its own x86 platform everywhere, also landed it with a long and expensive development process, particularly to meet the challenge of matching ARM in terms of low power consumption.
Last year, there was speculation that Intel would manufacture Apple’s mobile processors in future generations, perhaps in return for getting Atom into some of the iOS giant’s products.