Outgoing Intel-CEO has just one regret: Missing out on the iPhone

Intel is a name synonymous with silicon chips. The company has been a dominant player in the chip industry for decades now, but their strong position is being threatened by the smartphone revolution. These billions of low-power high-mobility devices are mostly based on the ARM architecture and built by companies such as Samsung and Qualcomm eschewing Intel altogether. 

Now the company has finally started to move in the right direction to compete in this field, and for the last few quarters they have been producing low powered chips that are truly competitive in the market, and Intel might have itself a winner with the latest batch of chips that it announced a week ago.

However there are some who say that it might already be too late. It's been almost six years to the day since the iPhone was first unveiled and that revolution took the world by storm. Intel had a chance to be a part of it but they didn't take it. In an interview with The Atlantic, Intel's out-going CEO, Paul Otellini, points to that moment as the only one he regrets during his tenure:

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."

During this same period though, Intel solidified its position as the only big player when it comes to desktop and laptop chips. They destroyed AMD and by the end of 2009 their long-term rival announced they would stop making their own chips.

They also released series after series of brand new Core "i" processors starting with Nehalem, and going into the current Haswell. These brought back momentum and innovation to a field that had stagnated for a while. And recently they announced Silvermont, a new series of low-power chips that will finally bring them up to par with the competition.

All in all Intel has been around longer than most other Silicon Valley companies and it would be a big mistake to underestimate them. As one analyst said "If I'm looking out five, ten years, they could potentially bury everybody else".

Via: The Atlantic | Image via DigitalSpy

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I was talking to a bartender the other night and I asked her what kind of phone she had. She said she had a really old android phone and that she just ordered a new IPhone 5 because that's what everyone she knows has.

If you don't need FPU performance there seems to be no problem with using the current AMD offerings…

Intel have done enough damage in the desktop laptop world, certainly don't want them doing the same thing in the mobile world.

AMD for me on desktops and laptops, I would never buy a computer, phone or tablet with Intel in if I can help it.

The quote talks about costs and volume. Wasn't the real problem that Intel never had a chip that could compete with ARM in terms of low power and efficiency?

Mackster said,
The quote talks about costs and volume. Wasn't the real problem that Intel never had a chip that could compete with ARM in terms of low power and efficiency?

He's not talking about x86.

From 2002-2006, Intel produced an ARM chip, the XScale.

There were several rumors that the XScale had been selected to power the iPhone. In fact, both Apple and Intel employees had accidentally mentioned this publicly. Plus, Apple had just switched to x86 for the Mac, so there were also rumors that it was a package deal.

The fact that there were so many leaks suggests that Intel was quite close to getting the iPhone contract. They must've lost out at the last minute.

I'm not convinced that this would've worked out for Intel. It's always easy to look back with hindsight bias and say, oh, well, we should've been part of the iPhone. But if Apple was squeezing them so hard even during negotiations, then what's to say that Apple wouldn't demand price cuts later on? We've seen how Apple treats its suppliers. Intel may never have been able to make a profit on the iPhone. Indeed, we have evidence of how tough the market is. Texas Instruments exited the ARM market after smartphones became wildly successful.

JHBrown said,
The iPhone will be #1 or 2 for many years to come. Leading or just trailing Android.

"was" is the correct verb.

JHBrown said,
The iPhone will be #1 or 2 for many years to come. Leading or just trailing Android.

you... haven't read the sales / adoption numbers for a few years have you?....

Dont know what are people talking about really.
Iphone is n1 sales phone since its release 6 years ago. Who cares ios or android on this article. We are talking about chip production here. I dont think there is any arm chip out there that surpasses apple`s own Ax production.
Intel really missed it badly there. Also we did. power consumption on iphones would have been cut by a third in any of their iterations thanks to Intel advanced production process.
That would pushed the industry one year to the future, at least.

iguanas said,
Iphone is n1 sales phone since its release 6 years ago. Who cares ios or android on this article. We are talking about chip production here. I dont think there is any arm chip out there that surpasses apple`s own Ax production.

Do you know anything about the iPhone? Apple doesn't produce Ax chips. Their CPU's are produced by Samsung. And Apple hasn't been #1 with phone sales since its release: http://www.sfgate.com/business...le-iPhone-4S-as-4326751.php