Inthink if Intel came out with a compelling product, Apple would have switched. I suspect they invested in ARM because it made sense at the iPod level, but once you start converging mobile and desktop experiences, there are major benefits to having the same architecture for both. Just look at how rampant the ARM MacBook rumors have been for the last few years.
I think the ARM investment by Apple was good regardless of whether they wanted to switch to Intel for higher end mobile, so I don't see it as evidence as to why they didn't want to.
Nobody was waiting for Intel to get into the cellphone market. The TDP of Intel chips just never made sense, and it was clear that this was because they just didn't institutionally care about that market segment in a real way.
Maybe pundits were waiting, but nobody serious.
Edit: and all these ARM desktop rumors are just that, rumors. They have the ability to ship a competive low to mid end laptop on their own arm chips today, and aren't. Their wide OoO designs would run beautifully in a formfactor that isn't thermally throttled so much. IMO they don't want to switch ISAs and are waiting out the x86_64 patents.
https://en.wikipedia.org/wiki/Apple_Newton
...I'm not sure it was before the Pentium though, because it appears they both came out in 1993.
Edit: Like they had been using ARM since before Intel released the original Pentium.