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.
> "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.