Intel missed a trick when it didn’t sign a deal with Apple to provide the chips for its first iPhone, former CEO Paul Otellini admitted.
He told The Atlantic that Apple’s offer had come too cheap, with Intel underestimating the phone's popularity. He spoke as his successor, Brian Krzanich, promised investors a renewed focus on mobile at a shareholder meeting yesterday.
"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," said Otellini.
Apple eventually plumped for a modified ARM chip produced by Samsung, which it's continued to use up until its most recent iPhone and iPad models.
"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," he said. "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 100 times what anyone thought."
Otellini added that he should have followed his instincts and struck a deal, despite the issues around cost.
"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. My gut told me to say yes," he said.
Intel "missed" mobile
Incoming CEO Brian Krzanich pledged a stronger focus on mobile, admitting that the firm had been late to market.
"Yes, we missed it, we were slow to tablets and some of the mobile computing," he told shareholders. "We do believe we have a good base."
The firm is set to release new mobile chips, with its Silvermont architecture offering processors with better performance or less power consumption.
Upcoming Atom processors based on the updated architecture include Bay Trail, which the firm said could lead to thinner tablets with all-day battery, and Merrifield for high-end smartphones. The firm also said it would integrate LTE into future Atom chips, which Krzanich said should "open up the business" for mobile.