Intel chips could have powered first iPhone, CEO Otellini says

Posted:
in iPhone edited January 2014
As Paul Otellini relinquishes the reins of chipmaker Intel, the outgoing chief executive reveals in an in-depth profile that he ultimately passed on a contract to build the silicon which powered Apple's original iPhone, a regretful decision given the handset's wild success.

Paul Otellini
Retiring Intel CEO Paul Otellini.


In an interview with The Atlantic, Otellini said Intel had the chance to be an integral part of Apple's iPhone project by manufacturing the processors that power the device, but the executive decided against moving forward with what would have been a winning bid. Otellini is retiring from his post today.

"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," he said.

Apple ended up using a Samsung-built ARM system-on-chip design for the first iPhone, and has subsequently relied on the architecture for its entire iOS device lineup. The Cupertino, Calif., company introduced its first in-house designed ARMv7 core with the A6 SoC used in the latest iPhone 5.

"The thing you have to remember is that this was before the iPhone was introduced and no one knew what the iPhone would do," the Intel chief said. "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."

With Intel out of the game, Apple turned to supplier Samsung for its chipmaking needs. The Korean company's fabrication facilities are still used to churn out Apple's A-series processors, though the partnership may soon end as tensions between the two companies reach a breaking point.

Still, Samsung has greatly benefitted from the lucrative Apple contract for the past six years, an enviable position that could have been Intel's.

"The lesson I took away from that was, while we like to speak with data around here, so many times in my career I've ended up making decisions with my gut, and I should have followed my gut," Otellini said. "My gut told me to say yes."
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Comments

  • Reply 1 of 39
    jd_in_sbjd_in_sb Posts: 1,484member
    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.
  • Reply 2 of 39
    sflocalsflocal Posts: 4,547member
    Could have... would have... should have... but you didn't. Hindsight always provides a view with 20/20 vision.

    If your gut said to do it, and you didn't, well then cry me a river. You failed as a decision-maker. That's what you get for looking at spreadsheets and numbers by pencil-pushers instead of seeing the bigger picture.

    Now, Intel - under your watch - is slowly becoming irrelevant in a post-PC world, and you and your wasteful, inefficient PC-cronies contributed to it.

    Have a nice day.
  • Reply 3 of 39
    smileydudesmileydude Posts: 108member

    Quote:

    Originally Posted by jd_in_sb View Post



    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.


     


    Nothing was said in the article that says this would've been an x86 chip -- it could've very well have still been an ARM chip, with Intel as the manufacturer.  We just don't know.

  • Reply 4 of 39
    dreyfus2dreyfus2 Posts: 1,070member

    Quote:

    Originally Posted by jd_in_sb View Post



    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.


     


    Really depends on when these talks took place. Intel sold its XScale (ARM processor) line to Marvell in June 2006. Maybe their decision was the result of balancing the $600m bid from Marvell against a potentially lossy business with Apple...

  • Reply 5 of 39
    bcodebcode Posts: 138member

    Quote:

    Originally Posted by jd_in_sb View Post



    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.


     


    From the sounds of the article, Apple already had an ARM chip design in mind and were simply looking for a fab...  Intel definitely didn't have an x86 chip that could compete with ARM on battery life at that time.

  • Reply 6 of 39
    maestro64maestro64 Posts: 4,527member


    What I find funny about this and there maybe more to this than costs. Intel makes bets all the time and do things thinking the costs will work out over time as they develop the market place. They piss away more money on these beat than most company. Why not bet on the Apple idea. It sound like the whole VZ thing all over, VZ was giving the opportunity and claims they walked away, in reality I think Apple never plan to do business with them since they were CDMA and the rest of the world was on GSM at the time.


     


    You could see Apple not telling Intel the processor was for a phone, but with any stretch of the imagination they should have known it was some portable device and the ipod was going gang busters and it could have been the next SOC for ipod (which it was with extra features)

  • Reply 7 of 39
    cityguidecityguide Posts: 129member
    Paul would have benefited from some advice:

    "Don't be trapped by dogma %u2013 which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And, most important, have the courage to follow your heart and intuition."
  • Reply 8 of 39
    haggarhaggar Posts: 1,568member


    Apple will not make a video iPod. Nobody wants to watch video on an iPod.


     


    Intel is evil.  Apple will never switch to Intel processors.

  • Reply 9 of 39
    kdarlingkdarling Posts: 1,640member

    Quote:

    Originally Posted by dreyfus2 View Post


    Really depends on when these talks took place. Intel sold its XScale (ARM processor) line to Marvell in June 2006. Maybe their decision was the result of balancing the $600m bid from Marvell against a potentially lossy business with Apple...



     


    That's true.  An XScale was THE hot smartphone processor at the time.  

  • Reply 10 of 39
    ericthehalfbeeericthehalfbee Posts: 4,046member

    Quote:

    Originally Posted by sflocal View Post



    Could have... would have... should have... but you didn't. Hindsight always provides a view with 20/20 vision.



    If your gut said to do it, and you didn't, well then cry me a river. You failed as a decision-maker. That's what you get for looking at spreadsheets and numbers by pencil-pushers instead of seeing the bigger picture.



    Now, Intel - under your watch - is slowly becoming irrelevant in a post-PC world, and you and your wasteful, inefficient PC-cronies contributed to it.



    Have a nice day.


     


    I think you're missing the point.


     


    People have stated recently they doubt Intel would fab processors for Apple. But clearly they were thinking of becoming a partner with Apple way back before the first iPhone came out. Intel is now in a great position with some of the best fabs around. Who better to help Apple dump Samsung than the world's most advanced chip maker?


     


    I don't think it's about crying over past mistakes. I think it's about showing they're willing to work with Apple in the future. Everyone assumes TSMC will be making Apple's future processors. Do we know this for sure? Can we really rule out Intel, who obviously sees PC market share declining while mobile is taking off?

  • Reply 11 of 39
    jd_in_sbjd_in_sb Posts: 1,484member

    Quote:

    Originally Posted by SmileyDude View Post


     


    Nothing was said in the article that says this would've been an x86 chip -- it could've very well have still been an ARM chip, with Intel as the manufacturer.  We just don't know.





    Good point. I hadn't thought of that.

  • Reply 12 of 39
    jd_in_sbjd_in_sb Posts: 1,484member

    Quote:

    Originally Posted by EricTheHalfBee View Post


     


    I think you're missing the point.


     


    People have stated recently they doubt Intel would fab processors for Apple. But clearly they were thinking of becoming a partner with Apple way back before the first iPhone came out. Intel is now in a great position with some of the best fabs around. Who better to help Apple dump Samsung than the world's most advanced chip maker?


     


    I don't think it's about crying over past mistakes. I think it's about showing they're willing to work with Apple in the future. Everyone assumes TSMC will be making Apple's future processors. Do we know this for sure? Can we really rule out Intel, who obviously sees PC market share declining while mobile is taking off?





    Being just a fab for Apple designs is not necessarily a bright future for Intel. Big money is made when you own the most popular architecture. But it would be great if Apple dumped Samsung for Intel.

  • Reply 13 of 39
    zebrazebra Posts: 34member

    Quote:

    Originally Posted by EricTheHalfBee View Post


     


    I think you're missing the point.


     


    People have stated recently they doubt Intel would fab processors for Apple. But clearly they were thinking of becoming a partner with Apple way back before the first iPhone came out. Intel is now in a great position with some of the best fabs around. Who better to help Apple dump Samsung than the world's most advanced chip maker?


     


    I don't think it's about crying over past mistakes. I think it's about showing they're willing to work with Apple in the future. Everyone assumes TSMC will be making Apple's future processors. Do we know this for sure? Can we really rule out Intel, who obviously sees PC market share declining while mobile is taking off?





    Good point. Intel is the better supplier because they will stick to their core business of making chips instead of competing directly with their client like Samsung does. They also need the business in view of declining PC sales across the board.

  • Reply 14 of 39
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by jd_in_sb View Post



    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.


    Um, they mean being the mfg of Apple's ARM chips is how I'm reading it.  Apple does the design and Intel would mfg it FOR Apple instead of having to go to Samsung.  

  • Reply 15 of 39
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by SmileyDude View Post


     


    Nothing was said in the article that says this would've been an x86 chip -- it could've very well have still been an ARM chip, with Intel as the manufacturer.  We just don't know.



    From what the article says, it was that Apple approached Intel to do what Apple ended up going to Samsung for.  MFG ARM CHIPS.

  • Reply 16 of 39
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by EricTheHalfBee View Post


     


    I think you're missing the point.


     


    People have stated recently they doubt Intel would fab processors for Apple. But clearly they were thinking of becoming a partner with Apple way back before the first iPhone came out. Intel is now in a great position with some of the best fabs around. Who better to help Apple dump Samsung than the world's most advanced chip maker?


     


    I don't think it's about crying over past mistakes. I think it's about showing they're willing to work with Apple in the future. Everyone assumes TSMC will be making Apple's future processors. Do we know this for sure? Can we really rule out Intel, who obviously sees PC market share declining while mobile is taking off?



    TSMC is already on tap to make the next gen Apple ARM chips.   Intel MIGHT be brought in to do it, but Apple's gone to TSMC for the A7's.

  • Reply 17 of 39
    bugsnwbugsnw Posts: 716member
    That's interesting. Someone needs to invent a time machine so we can go back and kick Otellini in the balls and change the trajectory of iOS hardware.

    Would they be using smaller processes by now, i.e. more powerful, cooler chips? Intel has the fab thing down pat.

    On the other hand, the way it turned out, Apple has more control and maybe more innovations will bear fruit from Intel's seemingly screwy decision.
  • Reply 18 of 39
    ericthehalfbeeericthehalfbee Posts: 4,046member
    drblank wrote: »
    TSMC is already on tap to make the next gen Apple ARM chips.   Intel MIGHT be brought in to do it, but Apple's gone to TSMC for the A7's.
    That's the rumor, but has anyone actually confirmed TSMC is contracted to fab chips for Apple?
  • Reply 19 of 39
    suddenly newtonsuddenly newton Posts: 13,751member
    The spilled milk Ontellini is crying over isn't the lost opportunity for the first iPhone batch, but to get intel chips into the ground floor of the 2nd smartphone revolution. Had intel powered those chips, they would probably have had an easier "in" to the subsequent post-PC revolution (iPad, AppleTV), and perhaps leverage that to get contracts from other device makers. They wouldn't be on the outside looking in.

    It's hard to imagine an intel x86 chip in an iPhone, and I don't think the chips out in the 2005-2006 time were very efficient compared to ARM, so I wonder if it was some other processor family intel had in its bin...
  • Reply 20 of 39
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by jd_in_sb View Post



    At the end of the day I don't think Apple would have picked Intel because their chips used too much power when compared to ARM.


    They wanted to use ARM, it was just using Intel to mfg the chip for them.  There were lots of ARM designs floating around.   it didn't say that they wanted a specific INTEL chip, just a chip Apple was interested.  That's how I read it.

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