As Intel CEO Paul Otellini steps down from his post today, The Atlantic has published a lengthy profile of the outgoing CEO. In the article, Otellini reveals what might have been: He says that he personally shot down a chance to put Intel processors inside the original Apple iPhone.
He tells The Atlantic, with regret: “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 me in a two-hour conversation during his last month at 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. 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.”
“My gut told me to say yes,” Otellini added.
It could be considered questionable that Intel ever was really a front-runner in the iPhone CPU sweepstakes, given their struggle to produce low-power smartphone chips. However, rumors did abound around the time of the iPhone’s introduction that certainly suggested they were in the mix.
The day after the iPhone was announced, Reuters quoted an unnamed Apple Germany executive that Intel would be inside the iPhone. The story was withdrawn the same day, but later that year Intel claimed that the company’s Silverthorne chip, later to known as the Intel Atom, would be used by Apple. It’s also possible that Intel may have had a shot at simply acting as a foundry for Apple’s system-on-a-chip.
It’s unknown how close Intel actually came to making a deal with Apple, but the loss is apparently one of the great regrets of outgoing CEO Otellini.