Whoops! Intel Passed On The Original iPhone Design
Today is outgoing Intel CEO Paul Otellini’s last day at the company, and although he’s left the company better off than when he found it, in an interview with The Atlantic he let slip one regret he had from his tenure--Intel could have made the chips for the iPhone.
Apparently, Apple approached Intel about making chips for the then-unknown device, and Otellini said that although his gut was telling him to dive in, he couldn’t see how it would be profitable for Intel.
“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 didn’t believe they could make up the cost in volume, but of course as history has borne out, iPhone sales volume was exponentially greater than most anyone thought.
"We ended up not winning it or passing on it, depending on how you want to view it”, he added. “And the world would have been a lot different if we'd done it.”
Otellini passing on having a part in the iPhone was a big whiff (especially in light of Intel’s continued struggles in that market), and it makes for some great tech lore, but at the end of the day, Otellini had a remarkable run as Intel chief. During his time at the helm, he helped the company grow its business from $34 billion to $58 billion.
Apparently, Apple approached Intel about making chips for the then-unknown device, and Otellini said that although his gut was telling him to dive in, he couldn’t see how it would be profitable for Intel.
“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 didn’t believe they could make up the cost in volume, but of course as history has borne out, iPhone sales volume was exponentially greater than most anyone thought.
"We ended up not winning it or passing on it, depending on how you want to view it”, he added. “And the world would have been a lot different if we'd done it.”
Otellini passing on having a part in the iPhone was a big whiff (especially in light of Intel’s continued struggles in that market), and it makes for some great tech lore, but at the end of the day, Otellini had a remarkable run as Intel chief. During his time at the helm, he helped the company grow its business from $34 billion to $58 billion.
