> Not noticing a hugely growing segment that was bringing insane reams of cash to Apple, and Qualcomm, Samsung and others involved is not something I could call astute.

And it's not like they didn't notice either. Apple literally asked intel to supply the chips for the first iPhone, but the intel CEO at the time "didn't see it".

https://www.theverge.com/2013/5/16/4337954/intel-could-have-...

I agree mobile was a miss but the linked article actually quotes Intel's former COE making a pretty good argument why they missed:

> "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."

In that circumstance, I think most people would have made the same decision.

Kind of speaks to how Intel was not competitive in the space at all. If it was truly that the marginal cost per part was higher than the requested price, either Apple was asking for the impossible and settled for a worse deal with an ARM chip, or Intel did not have similar capabilities.

Intel also had a later chance when Apple tried to get off the Qualcomm percent per handset model. This was far after the original iPhone. Apple also got sued for allegedly sharing proprietary Qualcomm trade secrets with Intel. And Intel still couldn’t pull it off despite all these tailwinds.

"We couldn't figure out how much a chip design would cost to make" is pretty damning, in my book.

I’m not so sure, he made a choice purely on “will it make money now” not “well let’s take a chance and see if this pays of big and if not we’ll loose a little money”

It’s not like they couldn’t afford it and taking chances is important

Ok, but you have to view this through the lens of what was on the market at the time and what kind of expectations Intel likely would have had. I can't imagine that Apple told Intel what they were planning. Therefore, it would have been reasonable to look around at the state of what existed at the time (basically, iPods, flip phones, and the various struggling efforts that were trying to become smartphones at the time) and conclude that none of that was going to amount to anything big.

I'm pretty sure most people here panned the iPhone after it came out, so it's not as if anyone would have predicted it prior to even being told it existed.

> In that circumstance, I think most people would have made the same decision.

In that circumstance, I think most MBAs would have made the same decision.

Fixed that for you

And that statement is hilarious in light of the many failed efforts (eg subsidies for Netbooks and their embedded x86 chip) where they lit billions on fire attempting to sway the market.

FWIW I don't buy his explanation anyway. Intel at the time had zero desire to be a fab. Their heart was not in it. They wanted to own all the IP for fat margins. They have yet to prove anything about that has changed despite the noise they repeatedly make about taking on fab customers.

That was very luck for Apple though. Nokia made deals with Intel to provide the CPU for upcoming phone models, and had to scramble to redesign them when it became clear Intel was unable to deliver.

Not quite true - the intel projects were at a pretty early stage when Elop took over, and the whole Microsoft thing happened - and the projects got canned as part of the cleanup and moving to Windows for the phones.

The CPUs were indeed horrible, and would've caused a lot of pain if the projects had actually continued. (source: I was working on the software side for the early Nokia intel prototypes)

Thanks for the insights. N9 was originally rumored to use Intel, and it was speculated so [1] still half a year before the release. Was that then also switched by Elop as part of the whole lineup change, or were these rumors unfounded in the first place?

[1] https://www.gottabemobile.com/meego-powered-nokia-n9-to-laun...

Pretty much all rumors at that time were very entertainingly wrong.

I think at the time that article got published we didn't even have the intel devboards distributed (that is a screen and macroboards, way before it starts looking like a phone). We did have some intel handsets from a 3rd party for meego work, but that was pretty much just proof of concept - nobody ever really bothered looking into trying to get the modem working, for example.

What became the N9 was all the time planned as an arm based device - exact name and specs changed a few times, but it still pretty much was developed as a maemo device, just using the meego name for branding, plus having some of the APIs (mainly, qt mobility and QML) compatible with what was scheduled to become meego. The QML stuff was a late addition there - originally it was supposed to launch with MTF, and the device was a wild mix of both when it launched, with QML having noticeable issues in many areas.

Development on what was supposed to be proper meego (the cooperation with intel) happened with only a very small team (which I was part of) at that time, and was starting to slowly ramp up - but massive developer effort from Nokia to actually make a "true" meego phone would've started somewhere mid-11.

Very interesting, thanks for setting the record straight!

> ARM has been really competitive since

And a few years prior to that Intel made the most competitive ARM chips (StrongARM). Chances are that an Intel chip would have powered the iPhone had they not scrapped their ARM division due to “reasons”

Intel had purchased/gotten StrongARM from DEC.

DEC had started developing ARM chips as they concluded it was a bad idea to try and scale down their alpha chips to be more energy efficient.

Then, after the success of these ARM chips in the blackberry and most of the palm PDAs as well as MP3 players and HTC smartphones, Intel sells it off, so it could focus on trying to make its big chips more energy efficient, making the mistake DEC avoided.

iPhone was a defining moment, but at the time it was completely obvious that smartphones would be a thing, it's just that people thought that the breakthrough product would come from Nokia or Sony-Ericsson (who were using ARM SoCs from TI and Quallcomm respectively). Selling off the ARM division would not have been my priority?

So it's a string of unforced errors. Nevertheless, Intel remains an ARM licensee, they didn't give that up when selling StrongARM, so it seems some people still saw the future..

Sounds like the classic Innovators Dilemma. There wasn't a lot of margin in the ARM chips so Intel doubled down on their high margin server and desktop chips. ARM took over the low end in portable devices and is now challenging in the datacenter.

> DEC had started developing ARM chips as they concluded it was a bad idea to try and scale down their alpha chips to be more energy efficient.

I thought this was interesting enough to track down more of the backstory here, and found this fascinating article:

https://archive.computerhistory.org/resources/access/text/20...

Page 60, hard breaks added for readability:

Baum: Apple owned a big chunk of it, but when Apple was really having hard times, they sold off their chunk at quite a profit, but they sold off the chunk. And then-- oh, while Newton was going on, some people from DEC came to visit, and they said, “Hey, we were looking at doing a low power Alpha and decided that just couldn’t be done, and then looked at the ARM. We think we can make an ARM which is really low power, really high performance, really tiny, and cheap, and we can do it in a year. Would you use that in your Newton?” Cause, you know, we were using ARMs in the Newton, and we all kind of went, “Phhht, yeah. You can’t do it, but, yeah, if you could we’d use it.”

That was the basis of StrongARM, which became a very successful business for DEC. And then DEC sued Intel. Well, I worked on the StrongARM 1500, which was a very interesting product. It was an ARM and a DSP kind of highly combined. It was supposed to be like video processing using set top boxes, and things like that. And then we finished that project and our group in Palo Alto, we were just gonna start an Alpha project.

And just then it was announced that DEC was-- no. No. Intel, at that time, Intel, DEC sued Intel for patent violations, didn’t go to them and say, “Hey, pay up or stop using it.” They just sued them. Intel was completely taken by surprise. There was a settlement. The settlement was you have to buy our Microelectronics Division and pay us a whole pile of money, and everything will go away.

So they sold the Microelectronics Division, which we were part of, except for the Alpha Design Group, 'cause they didn’t think that they could sell that to Intel and have the SEC approve, 'cause the two can conflict. So I went away on vacation not knowing whether I would be coming back and working for Intel, or coming back working for DEC. And it turned out they decided to keep the Alpha Design Group, so I was still working for DEC. Except the reason for the lawsuit was Compaq wanted to buy DEC, but didn’t want to buy ‘em with this Fab and Microelectronics Division. So by doing this, they got rid of the Microelectronics Division, and now they could sell themselves to Compaq.

Apple has been working with Arm since 1987, when work on the Apple Newton started: https://www.cpushack.com/2010/10/26/how-the-newton-and-arm-s...