Ex-Intel CEO Admits Not Building the Chip for the iPhone and iPad was a Huge Mistake

iPhoneThe Atlantic recently profiled Intel CEO Paul Otellini, who ceded his post after 8 years helming the renown chip maker. Yesterday was Otellini’s last day in the office. Though his Intel colleagues, and even former rivals, like AMD CEO Hector Ruiz, were willing to praise Otellini’s accomplishments, the man himself admits that he could have done even more for the company had he agreed to make chips for the iPhone prototype.

Otellini told the Atlantic, “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.”

Atlantic reporter Alexis Madrigal noted the regret he heard in Otellini’s voice as Intel’s top man described his decision. “The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut,” Otellini said. “My gut told me to say yes.”

Silicon Valley has changed greatly during Otellini’s tenure with Intel. He witnessed the rise — and presumed fall — of the PC and the dawn of the mobile computing era.  Incoming Intel President Renee James compares his place in the industry to Steve Jobs or Bill Gates. His regrets about his failure to forge a deal with Apple that would have put Intel chips in iPhones show that every hardworking person will inevitably face a few missteps.

Apple’s relationship with Intel will continue to evolve in the post-Otellini era. Will the rumor that Intel will make A7 chips for Apple pan out? We’ll have to wait and see.

About Emily: Emily is a freelance writer who loves discovering new apps whenever she can pry the iPad away from her children or husband. You can contact her via Twitter: @whatwentwrite

  • Josh Dombro

    This is really interesting. Of course not working with Apple looks foolish now, but at the time they were mostly just iPods and computers… Otellini’s logic was right, but things didn’t work out like they did on paper. Too bad that such a successful and influential person was such a major regret over one business decision.