Intel Missed a Chance to Make Processors for the iPhone: Otellini
Paul Otellini said Apple approached Intel about making the chip for the first iPhone, but that it didn't make financial sense at the time.Intel is a $53 billion company in desperate need of a strong mobile play, and according to former CEO Paul Otellini, he let a golden opportunity slip through his fingers several years ago. Speaking to The Atlantic as he prepared to step down as Intel’s top executive, Otellini recalled the time when Apple officials—then in the process of developing what would become the iPhone—approached the giant chip maker about making the processor for the device. Intel already was making chips for Apple’s Mac products. However, not realizing the ripple effect the then-unnamed mobile device would have on the industry, he passed on the deal, saying the financial numbers didn’t seem to make sense. "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," Otellini told The Atlantic in a story published May 16. "The thing you have to remember is that this was before the iPhone was introduced and no one knew what the iPhone would do.” Apple officials were interested in a particular chip, and let Intel know that they would only pay a certain price for it, and nothing more.
“[T]hat price was below our forecasted cost,” Otellini 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 100x what anyone thought."