Otellini: Intel passed on the original iPhone

Outgoing Intel CEO Paul Otellini had some interesting things to say in a recent interview with The Atlantic. Among them: the revelation that he passed up the opportunity to have Intel silicon inside the original iPhone. A squabble over pricing apparently led Otellini to back off, steering Apple right toward the ARM-powered competition.

Here’s what happened, in Otellini’s words:

We ended up not winning it or passing on it, depending on how you want to view it. 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… At the end of the day, there was a chip that they were interested in that they wanted to pay a certain price for and not a nickel more and that price was below our forecasted cost. I couldn’t see it. It wasn’t one of these things you can make up on volume. And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.

The Atlantic says Otellini expressed visible regret when telling the story. The retiring Intel chief lamented that he should have followed his gut and not the data alone. "My gut told me to say yes," he told the paper.

The smartphone market—and Intel’s bottom line—would certainly look a lot different today if Otellini had done that. I don’t know if the iPhone would have been better, though. (Thanks to AppleInsider for the link.)

Comments closed
    • ezrasam
    • 8 years ago

    At least now, we have some competition…
    Market might have even became stagnant if it was the other way

    • smilingcrow
    • 8 years ago

    In an alternative reality Windows 8.1 and 9 are a massive success and almost everyone buys a Windows tablet or convertible device with an Intel Bay Trail or Haswell chip and the ARM bubble is burst. People realise that a multi purpose device is far more flexible and Apple are stuck with two divergent operating systems ruing the day they chose a different chip for mobile.

    • WaltC
    • 8 years ago

    [quote<]We ended up not winning it or passing on it, depending on how you want to view it. [/quote<] Man...there's one heck of a lot of difference between "not winning it" and "passing on it"...;) The inference is that if Intel had "wanted to" it could have gotten the iPhone contract. Ridiculous. Intel had nothing then (or now) that would have enabled them to get the iPhone. Intel is still hard at work working on its ARM power-level cpus. I have no doubt that Intel will eventually get there and deliver cpus with ARM power sipping but with 2x-3x the performance of ARM architectures. The fact is, though, that at the time Intel had nothing with which to bid for that level of power consumption. This is like a huge pile of BS..."depending on how you view it"....;) But, this is the Intel I used to know and love and had such fun castigating in the AMD64 versus Prescott days---during the year long, Intel "You don't need 64-bits on the desktop" ad campaign...;) I wonder how much more money Intel could have put on its bottom line if it had never mixed itself up with RAMBUS and it had not spent a year trying to get the computer industry to move to Itanium...? Now, there you have some *real* losses to talk about. Intel "didn't win the iPhone" contract, and just for grins and giggles, I would dearly love to know what Intel tech Intel used to "bid" on the original iPhone contract, if in fact Intel bothered to bid at all...!

    • BloodSoul
    • 8 years ago

    Hindsight is 20/20. Everyone is seeing this as “such a huge missed opportunity”, and though I agree with that I still agree with Otellini’s decision. If you agree to work with every single potential business partner that promises “the next big thing” there is really no way you can win… for every success on the scale of the iPhone there are an infinite number of failures.

    • moose17145
    • 8 years ago

    I very much respect what Otellini is doing by coming out and admitting to mistakes he/the company has made. I think many people often forget that the people running these companies ARE in fact still just human. Even the mighty Steve Jobs was still just a human. And like all humans, they ALL make mistakes or are unable to accurately predict the future. Many people see these people as these immortal gods (not always in a good way) of the industry because of their position and power over the industry, but in all fairness… these guys, even the bad ones… busted their @$$es off to get to where they are, and at what price? What sacrifices did they and their families often have to make in order for them to get to where they are?

    That being said… A few people already mentioned this, but iPhone sales initially were not that great. The price was simply too high for most consumers, and it was not until Apple had lowered the price some that they really took off. As mentioned, Intel was probably looking at the price Apple wanted to sell the iPhone for and just said “Yea… we are going to sell a lot… but not THAT many…” And volume DOES matter (more of my thoughts on this in a minute).

    A few people suggested that it would not have mattered because Intel at the time did not have a proper chip that was capable of doing what ARM could do (IE operate within a 2W power envelope). To this I would argue that I suspect that these negotiations were likely taking place over a year in advance of the iPhone actually being released. So Intel likely would have had time to R&D a chip design for Apple in time for the initial release. But… it could have been that they would have had to do so on an accelerated time frame, which would have significantly increased the R&D cost, and thus the bottom line break even point of the chips. And this also comes with risk… we have seen delays from ALL the major players when something doesn’t go right, and that’s when working without an accelerated time table. Working on an accelerated schedule means that absolutely everything have to be developed exactly on time and work properly. All risks to take into serious account. Not saying that is what was going on here, just saying it could have been a factor in their “cost / risk / benefit” equation that could not have been easily ignored.

    Volume. Now I know he stated that it would not have mattered how many of the chips they sold, but… THEN he also goes on to state that volume was over 100x what they had expected. Keep in mind that this new chip likely would have required them to retool an entire fab plant, would have a fairly high R&D cost, plus the cost of raw materials and personnel to make the chips. All expensive things. Duh. Now the way you offset this is you have to price your chips in a manner that you expect to sell X amount to break even on Y cost. Then hope you sell more than that to make profits to fund future endeavors. Again… Duh. When he said that they wouldn’t have made money no matter how many they sold… I suspect he meant that if they had sold than expected WITHIN REASON. Even if they sold 2 or 3x what they had expected, they would be losing money… and selling 2 or 3x what you expected to is a VERY good thing, it lowers your cost per chip, but perhaps the numbers still aren’t there to bring the cost down enough to be turning a profit. Those would be REASONABLE numbers to work with I suspect. But suddenly the demand is over 100x what you expected… that’s almost unheard of and ENTIRELY UNreasonable quantities more than we were expecting! And suddenly a number that large changes the cost equation quite a bit! When he said that volume would not have mattered, but then goes to say that volume was also over 100x what they had expected, to me it kind of reads like even if they had beaten their expected sales by 2 or 3x what they expected, it wouldn’t have changed much, but that at the same time selling over 100x the chips they were expecting to is now at a level of having enough volume that it in fact WOULD have changed the equation enough to significantly matter.

    Lastly they got their costs of production / R&D wrong. These things happen. Even to the best of the best. Honestly, I am shocked that either Intel or AMD can estimate R&D and production costs as well as they can. If this was going to be their first go at making a chip for a cell phone… well… that’s a bit different than desktop parts where they rein supreme and know exactly how it’s done and what it takes, so it is entirely possible they weren’t 100% sure on what exactly it was all going to take to make the thing. So they did what all extremely successful companies that have been around the block have to do. They have to assume that the cost is going to be on the higher end of the price range, and plan for that but hope that in the end it was actually closer to the lower end of the expected production cost. Plus sometimes prices fluctuate. Cost of silicon, perhaps the cost of retooling the plant ended up being cheaper than they expect because equipment prices ended up being lower than normal. Lots of things can end up changing the end cost of these things, many of which are not always predictable or in Intel’s control.

    And as to the ones who were saying that only the risk takers get big payoffs… Not always true… Intel has tried to do that in the past… and it did not always end well for them. Such as when they reworked the Pentium 4 into the Prescott core (which was a fairly heavy rework from the Northwood cores), and then at the same time tried to do an entirely new process change down to 90nm… it was a risky thing to do that didn’t end too well for them and they learned their lesson the hard way and was what made them invent their little “tick tock” method of production. They came out openly about this blunder and said they they will never do a brand new architecture on a brand new manufacturing process again because of there are just too many unknowns and risks involved. If they are going to make a brand new architecture, it will be made on an established manufacturing process, and if its a brand new manufacturing process, then it will be used for an already existing and established architecture. Working it that way is safer, allows you to more accurately predict time frames and costs, and also is a great way to mitigate risk in the event something doesn’t work out as hoped or planned.

    And lastly, lets not forget the cost of doing business with Apple. Sometimes the headaches just are not worth the rewords, and sometimes they are. Apple is not always and easy customer to deal with, and I am positive this was also taken into consideration.

    Anyways sorry that got so long, but it’s just my two cents on the matter.

      • brucethemoose
      • 8 years ago

      Wall of text! Who knew mooses could produce such detailed comments?

        • cynan
        • 8 years ago

        Apparently only certain meese are gifted with that particular talent.

      • NeelyCam
      • 8 years ago

      [quote<]Even the mighty Steve Jobs was still just a human.[/quote<] YOU LIE!

    • smilingcrow
    • 8 years ago

    I also passed on the original iPhone and the next and the next….
    I just wanted to get that burden off my chest.

    • tootercomputer
    • 8 years ago

    I suspect that this is just one of many hundreds of missed opportunities by key players in the high tech world. I suspect you could write an entire book about this.

      • NeelyCam
      • 8 years ago

      You could write a book about HP’s misses alone

        • indeego
        • 8 years ago

        I think Xerox would take the cake. The number of technologies out of PARC alone is mind-boggling.

          • moose17145
          • 8 years ago

          I could agree with that. If only Xerox had known what they truly had and how to exploit it at the time, the world would likely be a VERY difference landscape than it is today.

    • cynan
    • 8 years ago

    And around the same time, [i<]I[/i<] "passed" on investing in Apple stock. Meh. Hindsight is always 20:20. Good for him for owning up to it though - just shows how secure he's become with Intel's other successes (or success in general).

    • WillBach
    • 8 years ago

    Hi TR comment goers, staff,

    It’s been awhile since I’ve commented. Life has been busy and I have a new job (see disclaimer below). I want to jump back to this conversation later and bring up a few things regarding CPU and SoC design (both near and dear to my heart). These are widely understood in some circles so I don’t think any of them will be controversial but I’ll mention them here because I think they’re relevant to the discussion.

    … and I have run. I’ll edit this later. Sorry 🙁

    I am a Microsoft employee but these are just my views and I don’t speak for the company,
    – WillBach

    • indeego
    • 8 years ago

    Let us not forget that Apple set the initial price of the iPhone very high, and initial sales were lackluster. I can see that Intel’s beancounters probably saw the same thing if they knew Apple’s initial price range.

    It was the dropping of that price that really helped the iPhone take off.

    • anotherengineer
    • 8 years ago

    “Otellini: Intel passed on the original iPhone”

    Shouldn’t this say Otellini passed on the original iPhone, I mean since he was the CEO at the time and making the decisions?

    “The retiring Intel chief lamented that he should have followed his gut and not the data alone. “My gut told me to say yes,” he told the paper.”

    O well, no biggie, they are still making ginormous profits.

    • Krogoth
    • 8 years ago

    So what?

    Intel didn’t see the reason to go behind the iPhone. Nobody in the industry could have predicted that it draw smartphones out of the enterprise/business world and become a massive success.

      • smilingcrow
      • 8 years ago

      Well Apple thought as otherwise why did they bother?

        • NeelyCam
        • 8 years ago

        Yeah, but they had Steve Jobs. “Nobody in the industry” refers to companies that have only human employees

          • smilingcrow
          • 8 years ago

          Jobs is an android; his battery pack expired. Google even stole the name of their O/S from Apple; the dirty stinking evil tax avoiding shysters.

          Note. Firefox’s spell checker doesn’t recognise the word Google! I’m going to phone Brussels on Monday and get the EU on their ass.

      • davidbowser
      • 8 years ago

      I think you are making a historical mistake.

      The smartphone industry at the time was RIM, Palm, Nokia, Motorola, and MS. The first three were fighting it out and MS was thought to be poised to take over. Pretty much all the [url=http://www.windowsfordevices.com/c/a/News/IDC-Worldwide-smartphone-market-grows-85-yearoveryear/<]industry analysts thought[/url<] the industry was going to grow fast back in the early 2000s. If Intel made a mistake, it was by not understanding what the prevailing forecast for the smartphone market was. Regardless of whether they were betting on Apple, they were not really working in that space in any significant way.

        • Krogoth
        • 8 years ago

        The difference is that the smartphone players back then were focusing on the enterprise/business demographic. Intel’s shareholders didn’t see the reason to jump on the bandwagon as they were making far more revenue through their server, workstation, laptop and desktop users for these markets.

        They weren’t expecting Apple would manage to seize the attention of the mainstream market and experienced massive growth.

        Xerox made the same mistake back when they developed the first commercial desktop PC. At the time, businesses thought computers were strictly meant for professional and government types.

    • flip-mode
    • 8 years ago

    Awesome of Otellini to man up rather than post rationalize that he somehow made the right decision.

      • Meadows
      • 8 years ago

      He’s allowed to man up, he’s not CEO anymore.

    • blastdoor
    • 8 years ago

    [quote<] And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.[/quote<] I think it is totally understandable that Intel would have failed to predict iPhone volumes back in the 2005 to 2007 timeframe. It would have been reckless to assume, knowing what people knew then, that the iPhone would be as big as it became. The thing that is surprising is the forecasted cost being wrong. How does Intel get that wrong? Who knows better than Intel what the cost of making CPUs is? Are we to infer that Apple and Samsung are better at estimating costs??

      • NeelyCam
      • 8 years ago

      Cost is a function of volume. You estimate volume wrong, you get cost wrong.

        • blastdoor
        • 8 years ago

        Otellini specifically said “it wasn’t one of those things you could make up on volume”.

          • PixelArmy
          • 8 years ago

          Sounds like their manufacturing capabilities for the chip in question were better than expected / ahead of schedule. Sometimes you beat the odds, generally you shouldn’t plan around that.

            • blastdoor
            • 8 years ago

            Samsung appears to have been able to estimate the cost correctly, planned around it, and won the work and the profit. So it’s not like it wasn’t possible. It’s more like Intel messed up.

            But maybe Intel figures that as the market leader, they’re in a position to be more conservative in their estimates, while Samsung was more aggressive.

            So much for Andy Grove’s “Only the paranoid survive” mantra. Maybe the new mantra is “only the risk averse pay high dividends” or something.

            • PixelArmy
            • 8 years ago

            I’m not saying Intel did or didn’t screw up, only it’s not as trivial as a you seem to think, no one has “perfect information” to which they can plug into their computeProfit() function. Even the great Apple’s margins fluctuate, in this case the actual vs estimated straddled being positive and being negative. He didn’t say anything about it not being possible to calculate the correct cost, only that they were wrong.

            It’s possible to have low probability events occur that are positive that you simply [s<]don't[/s<] shouldn't plan around. (Not saying that it went down like that, just to keep an open mind that pleasant surprises do happen, though you shouldn't bet the farm that they will). Winning a contract and making a profit != estimating costs correctly - only that the a wrong estimate was acceptable by Apple and wasn't negative for Samsung vs the true costs. - Ex: Apple wants to pay $15 a chip and Samsung agrees to this because they think it would cost them $14 to make and the true cost turned out to be $14.50. Samsung is still good with Apple and still has a profit despite a poor estimation. - probably why you qualified this with "appears to have". Samsung making it profitable for Samsung is irrelevant to Intel making it profitable for Intel - did they ask for the exact same chip? probably not - do Samsung and Intel have the exact same capabilities/infrastructure? probably not. Being paranoid doesn't mean bet on everything.

          • NeelyCam
          • 8 years ago

          Ah, you’re right, he did say that (I didn’t read the article..)

          • ludi
          • 8 years ago

          I got the impression that he meant “At any volume we could reasonably foresee,” since he then indicates that actual volume was “100 times what anyone thought” — implying that their previous estimates were not even in the ballpark.

      • cynan
      • 8 years ago

      Why are you assuming that the proposed chip was completely designed or set in stone at the time Intel pulled out? “There was a chip that they were interested in” does not mean that the chip in question had been R&Ded 100% at that time. There could very well have been some unknowns that led to the inability to forecast exact costs, separate from something as mundane as volume/economies of scale.

        • blastdoor
        • 8 years ago

        There was nothing special about the first SOC that went in the iPhone. It wasn’t until the iPhone 4 that Apple started to move in the direction of making noticeable differentiation in their SOCs (and even that wasn’t very significant).

        I suppose an answer could be that Intel’s main bean counters are accustomed to counting x86 beans and not ARM beans, and so made some kind of dumb mistake. Not impossible.

        edit — another thought: perhaps because Intel expected this to be kind of a low volume deal, they didn’t really put their best foot forward in terms of running numbers. So maybe it was B-team bean counters doing the calculations, while the A-team was off focused on larger markets.

    • Hattig
    • 8 years ago

    So he says Apple had their eye on a chip, asked around for competitors’ offers, and they couldn’t even match the cost of that chip, never mind putting some profit on top for themselves?

    In addition, this was before the Atom, and even that wasn’t suitable for phones. They had nothing to offer in the <2W SoC area before 2008. Apple was probably fishing for some price quotes just to justify their own decision that they had already made.

    • jdaven
    • 8 years ago

    What chip could Intel make back in 2007 that would only consume 2W max? If they had such a thing, why did it take them almost five years to release a chip suitable for smartphones? I think Apple may have asked them to make something custom but Intel thought the cost to develop such a thing would be astronomical.

    Edit: The first Atom chip wasn’t released until a year after the iPhone and Xscale products were sold a year before the iPhone. I still don’t see what chip they could offer.

      • chuckula
      • 8 years ago

      If Intel sold Xscale a year before the iPhone launched, then it still definitely owned XScale at the time it was having these conversations with Apple. Intel would have made a customized ARM chip for the iPhone since Atom clearly wasn’t ready at the time.

    • chuckula
    • 8 years ago

    Short run: Very good for Apple & Very Bad for Intel.

    Long run: Would Intel have the same motivation to compete with ARM if it was just another ARM foundry churning out chips for Apple devices? Maybe not. Having an alternative to ARM is a good thing, and being locked into Apple long-term is not always a good thing though (ask Foxconn…)

      • nanoflower
      • 8 years ago

      If Foxconn locked in to Apple? They clearly are a big (maybe the biggest) customer of Foxconn but the company also has many other big customers. It’s also likely that Foxconn gained some of those customers because of their business with Apple. It’s equally likely that the Apple business has enabled Foxconn to grow much faster than it would have without that business.

      So while Apple may have much more say over what Foxconn does than they would desire, it’s equally true that the Apple business has been very good for Foxconn.

        • chuckula
        • 8 years ago

        Foxconn is definitely not 100% Apple based.. but a big big chunk of profit that Foxconn makes a whole lot of their biggest facilities are pretty much exclusively devoted to Apple. It’s kind of like how only a surprisingly small fraction of ARM chips actually end up in smartphones & tablets, but when you look at where the profits in the ARM world are centered, they have a disproportionately high share.

    • tanker27
    • 8 years ago

    Regardless of how the iPhone, Apple, and ARM have played out; It surprises me that a leader can come out and armchair quarterback his/her tenure. This is leadership 101 and it speaks volumes about who he is.

      • Beelzebubba9
      • 8 years ago

      In my experience, in a post NetBurst era Intel has been a lot more honest and forthcoming to the press. I assume they felt the need to build trust, and this is a good way to do it.

        • Captain Ned
        • 8 years ago

        Falling on your sword when it’s relevant builds huge reservoirs of trust.

    • Jigar
    • 8 years ago

    My O2 Atom use to eat battery like there is no tomorrow, Apple should be glad they didn’t route for Intel or it would have been one bad experience.

    • Sahrin
    • 8 years ago

    Yet another example of business wonks fucking it up.

      • Sargent Duck
      • 8 years ago

      Not neccessarily. Hindsight is 20/20 and as Paul said, the data at the time didn’t support the business. Had Paul gone with his gut and been wrong, he would have been called on it. At least this way he is in the clear as the data backs his decision up. There’s a reason why Intel is so large and it’s from making safe, conservative decisions.

        • Sahrin
        • 8 years ago

        [quote<]Not neccessarily.[/quote<] So you're saying the iPhone hasn't been a phenomenal success, and selling the chip in it to Apple would not have helped Intel (because Paul Otellini said otherwise). Let me make the situation more clear for you: Business wonks predicted the iPhone would not be a profit center. According to Paul Otellini, they were wrong.

          • Anomymous Gerbil
          • 8 years ago

          What? He never said what you wrote in your first para, and he already understands what you wrote in your second.

          The point is, quite often these decisions aren’t obvious at the time, and (with hindsight) he got this one wrong. Shit happens. The only unusual thing here is that a leader is coming out and talking openly about it.

            • nanoflower
            • 8 years ago

            It’s true things turned out differently but I don’t think anyone in charge of Intel would have made a different decision. His own people were telling him that they would lose money on every chip they sold to Apple at the prices they wanted and that the losses would continue into the foreseeable future. What businessman is going to want that business when it’s certain to cost them money (based on what they knew.) According to Ortenelli it didn’t matter how big of a success the iPhone might become because the loss would be there for Intel whether they sold 100 chips or a billion (based on what his people thought at the time.)

            It turns out that they were wrong about how quickly costs would come down on making those processors. That means Intel could have made money on selling them to Apple, but given that no one foresaw that happening I can’t blame Intel for passing on the business.

            • Sahrin
            • 8 years ago

            I said: “Yet another example of business wonks fucking it up.”

            He said: “Not necessarily.”

            Then I said: “Intel made the wrong decision.”

            And you said: “He already knows that.”

            …Are you sure you read the whole thread?

            • auxy
            • 8 years ago

            The problem here is that Sargent Duck (and possibly others) don’t know that “wonk” refers to a nerd or overly studious person, by which you meant the industry analysts, who do, indeed, stuff it up quite a lot.

            Everyone else in the thread assumed you meant Paul himself, “business wonks” meaning “idiot businessmen”. Paul did indeed make the safe decision based on the data presented to him.

            Nothing to see here, move along. (ノ´ー`)ノ

          • mutarasector
          • 8 years ago

          What the ‘business wonks’ predicted is irrelevant as to what profitability the iPhone would have. I tend to agree with the moose’s magnificent musing – at the time, Intel had nothing to fit the iPhone’s required power envelope. Had Apple gone with what Intel could have provided them at that time, there is a chance the iPhone would have ended up a rather different product that would never became as popular as it has, therefore Otelini’s decision was ultimately the correct one despite his 2d guessing himself… especially because of the unknowns in attempting to meet the requirements of the iPhone, the technological/process skill set Intel had at the time.

          Besides, I tend to think that after the Netbust fiasco, and Apple’s march towards mobile computing power envelopes, this is partly what actually spurred Intel along in accelerating its own architectural refinements towards the similar power envelope goals. After all, it sure as hell wasn’t competition from AMD (aside from Brazos)…

          Otellini’s “mistake” was a battle lost, but helped set it up towards winning the war… a war with ARM which Intel did predict years ago. Remember right around the time Intel settled with AMD in there suit, Intel even openly stated that AMD was not their real competition, but ARM was.

    • dpaus
    • 8 years ago

    Two important lessons:
    1.) Intel is not infallible (unlike, say, Apple)
    2.) Intel’s need for margin is their Achille’s Heel

      • HisDivineOrder
      • 8 years ago

      I feel like Intel’s biggest problem right now is their stubborn belief they are still in the 1990’s. They are joined in this problem by Microsoft. They still believe their products deserve a premium (and you can go get stuffed if you think you deserve better) instead of realizing they are in the fight of their lives and that the decisions they make here and now are determining where they wind up in the future in a big way.

      ARM would have been a nonstarter had Intel done a better job with Atom. Instead, they mostly refreshed the same silicon at virtually the same speeds for year after year while ARM crept up behind them, rogue-like. Android would have been a nonstarter had MS not so royally screwed up Windows Phone and Windows RT with delays and stupid, petty requirements like, “Every App must be installed from OUR store and only OUR store because we want to be like Apple.”

      The market already has one Apple. It won’t tolerate another one, especially from a company as close to Uncool Incarnate as Microsoft.

      The Wintel Alliance served these two well, but now they seem as bonded by their nostalgia and myopic view of the market as they once were in successful milking of the industry.

        • confusedpenguin
        • 8 years ago

        I miss the 90’s. 🙁

        • jdaven
        • 8 years ago

        Great post +1.

        • Krogoth
        • 8 years ago

        Intel isn’t stuck in the 1990s. They have been moving with the times. Their products get their premiums, because the market feels that worth their price. Intel is still at the cutting-edge of semiconduction production technology. (IMO it is their greatest asset)

        ARM just found a niche (ULV embedded platforms) and kept onto it, but that is slowly changing as Haswell and its successors will blow anything that ARM’s arsenal and only consume a little more power.

        • chuckula
        • 8 years ago

        [quote<] They still believe their products deserve a premium (and you can go get stuffed if you think you deserve better) instead of realizing they are in the fight of their lives and that the decisions they make here and now are determining where they wind up in the future in a big way.[/quote<] Funny how that works for Apple too if you think about it.

          • derFunkenstein
          • 8 years ago

          Yeah that seems more true of Apple than either MS or Intel.

        • brute
        • 8 years ago

        they DO deserve a premium. if they didnt, then they wouldn’t sell. check out some supply/demand curves.

        • chuckula
        • 8 years ago

        I don’t think a company that has been making low-power chip designs since the 1980’s qualifies as “rogue-like.” ARM has been in a single niche, low-power computing, for a very very long time and is well entrenched in that niche. If Intel being entrenched in a niche is bad for Intel, then the exact same things apply to ARM.

        Ask yourself this: in the last 5 years, has Intel done more to become competitive in mobile, or has ARM done more to be competitive in performance? If the Cortex A-15 (or severe dearth of smartphones using the real Cortex A15) is anything to go by, ARM has to deal with the exact same physics that Intel does, but ARM doesn’t get to control the chip manufacturing process the way that Intel does.

        • echo_seven
        • 8 years ago

        I would disagree that Microsoft believes that they are still in the 90s. Microsoft has done a whole lot of things that show they are desperately looking for something to replace the Windows/Office cash cow before it dries up. The problem is that none of those darts have hit the bullseye.

      • Anomymous Gerbil
      • 8 years ago

      Presumably (1) is a joke.

      I disagree with (2). You’d think that if he knew what huge volumes the iPhone would do, and how that would beneficially affect their production cost, he would have jumped at the opportunity.

      • PixelArmy
      • 8 years ago

      2) Yes, not wanting to lose money is a horrible way to run a business. *rollseyes*

        • axeman
        • 8 years ago

        AMD sells each chip at a loss, then makes it up with volume!

          • chuckula
          • 8 years ago

          You’re right… AMD is REALLY LOUD for such a small company!

      • chuckula
      • 8 years ago

      [quote<]1.) Intel is not infallible [/quote<] I thought the Pentium 4 proved that long before the iPhone happened.

    • bjm
    • 8 years ago

    Good, glad they passed on the iPhone. Nothing gets the competitive drive in Intel going like losing. Had Intel secured the original iPhone, we wouldn’t be seeing the intense competitiveness we’re seeing in the mobile space right now.

      • nanoflower
      • 8 years ago

      I don’t know if that is true. Intel might not have been pushing on their own, but you can count on Apple providing lots of pressure to bring down costs and improve the power usage of the processors while providing greater performance. That pressure from Apple would have been enough to make Intel put the resources on the project to accomplish what Intel has done since then. That’s due to just how big the order would become over time, though no one knew it at the time at Apple or Intel.

    • tipoo
    • 8 years ago

    Did they have anything that low power back then?

      • Klimax
      • 8 years ago

      They had Atom in pipeline, so maybe branching off and accelerating mobile-only design.

        • Klimax
        • 8 years ago

        Addenum:
        Found old article at Anandtech, where it was mentioned that original Atom was wanted by Apple.
        [url<]http://www.anandtech.com/show/2465[/url<]

      • Beelzebubba9
      • 8 years ago

      Intel had an ARM division and product line called X-Scale back then.

        • hendric
        • 8 years ago

        Which was and still is in the Blackberry phones. Otellini almost screwed up that relationship too. It’s why Intel will not be successful in the mobile business – all their mobile customers are second-class citizens to PC customers. Lower margin parts mean lower priority in the fabs.

    • MadManOriginal
    • 8 years ago

    Whoopsie.

    • Prion
    • 8 years ago

    I’m wondering what chip that would even be, sounds very unlikely to be anything x86 at that point. I’d have guessed XScale if they hadn’t already ditched it by then.

      • Beelzebubba9
      • 8 years ago

      Intel sold their X-Scale division to Marvel in 2006, which would have been smack in the middle of working on the SoC for Apple. My guess is that Intel sold their ARM division partially in response to not having any big customers like Apple (not that they knew what juggernaut Apple would become).

        • aceuk
        • 8 years ago

        I wonder what Bruce Wayne would have done with X-Scale if Intel sold the company to DC Comics? 🙂

          • smilingcrow
          • 8 years ago

          We all lose much sleep over that but thanks for reminding us of our nightly nightmare.

    • sonofsanta
    • 8 years ago

    And smartphones would have had even worse battery life than they already do… we’d only just be catching up now.

    Unless there was an entire other x86 design they were contemplating, of course.

      • lilbuddhaman
      • 8 years ago

      Have you not used an iphone? Their battery life blows.

        • Beelzebubba9
        • 8 years ago

        The iPhone has traditionally had better battery life than it’s competition, and the original Edge-only iPhone had better battery life than most of its successors.

      • nanoflower
      • 8 years ago

      That’s probably true for the first Iphone but it would have forced Intel to spend even more money/resources on getting power consumption down on the early Atoms which might have helped out Intel even more as ultrabooks and tablets came along.

      That being said I can’t blame Intel for turning them down. It would have been foolish to take on business that has a sure loss (based on what they knew at the time.) The fact that it didn’t turn out that way is something that you can’t count on.

        • sonofsanta
        • 8 years ago

        Well that’s the flipside of it – we’d have been in a worse situation initially, but possibly better off now as the tick-tock cadence with Atom might have been kicked off earlier.

        Also: not sure why downvoted? Not that it’s any great shakes, of course, but Intel have been losing on power consumption to ARM for 5 years now. I don’t think I’m saying anything controversial here, am I?

          • HisDivineOrder
          • 8 years ago

          You implied something good about Apple and said something specific about Intel being bad. It’s like SmileX. You can have one or the other, but not both.

    • tbone8ty
    • 8 years ago

    Wow. Things would of been totally different.

    ARM…ight?

      • Mourmain
      • 8 years ago

      Pet peeve: “would [i<]have[/i<] been".

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