8 ms·

Intel sold off Xscale (née StrongARM) just before the touchscreen smartphone boom started. Seems like they would have been well positioned to take the lead in t

by pavlov 4y ago

Intel sold off Xscale (née StrongARM) just before the touchscreen smartphone boom started. Seems like they would have been well positioned to take the lead in this market. Probably Apple would have used an Xscale SOC for the iPhone if Intel had taken it seriously. Strategic blunder of the century so far?

baybal2 4y ago
Non-touchscreen smartphone boom been going for years prior. The problem was that embedded OS-es like Symbian, A200, PalmOS were running circles around Windows Mobile. Most of them used Samsung SoCs which were few times slower than StrongARM. StrongARM was seen exclusively in the context of it being used to "lift" extremely bloated WinMo smartphones, and was otherwise thought as an overkill for other uses.
baq 4y ago
The biggest mistake of Paul Ottelini for sure. The world would look very, very different if he said yes.
- lr1970 4y ago
  Before becoming Intel's CEO Paul Otellini served as executive VP of sales and marketing. This uber-blunder is a great example what happens when you let a "bean-counter" run a tech company. EDIT: corrected factual error. Paul was never a CFO but much of his career was in sales and marketing. Sales do count as "bean-counters" because their main metric are counting PaL.
  - klelatti 4y ago
    That's not correct. Otellini did not serve as CFO at any time and did not have a finance background. Please check your facts before making a comment like this. Edit: I see you've changed your comment without acknowledgment. Still wrong 'sales and marketing' isn't 'bean counting' and Otellini had extensive 'tech' experience.
    - lr1970 4y ago
      Thanks for pointing out a factual error. I corrected it and added explicit EDIT paragraph.
  - voidfunc 4y ago
    Have their been any successful major companies run by former CFOs? My experience here is that it is often a death sentence via a long road or stagnation.
  - bushbaba 4y ago
    Disagree. The Sales leaders are generally also looking for continued growth 3 years out. Sales know there’s sprints but you are also running a marathon where continued growth YoY is expected. They should have seen the smartphone potential and started chipping away to grow their base long term. Similar to why the best sales leaders only do deals where there’s renewal possibilities in 2-3 years out.
  - svnt 4y ago
    I mean you should probably just own the whole mistake — in no world are bean-counters sales people. https://dictionary.cambridge.org/dictionary/english/bean-counter https://dictionary.cambridge.org/dictionary/english/bean-cou...
  - bee_rider 4y ago
    Some of their worst years were under Krzanich, who had an engineering background… I think it is hard to guess who’ll be a good CEO for a tech company. Someone like Lisa Su with a background in engineering but also lots of R&D seems like the best pick. The CEO doesn’t need to do the i-dotting, t-crossing engineering stuff anyway, having a good idea conceptual of what is upcoming and possible is more important.
    - TylerE 4y ago
      Seems like what you need is a triumvirate... an idea guy (The Jobs), a tech guy (The Wozniak), and a 3rd person who's main job is to keep the first two from killing each other, and ideally a sense for operations and PR.
      - mepian 4y ago
        Jobs wasn't too bad at tech, he passed Al Alcorn's job interview at Atari after all.
      - corford 4y ago
        Probably "The Eric Schmidt" would be that third person
helsinkiandrew 4y ago
Xscale sale was announced 7 months before the iPhone was announced, but presumably way after work had started and Apple had asked Intel for a processor. A truly poor decision. > There was just one problem: The PC era was about to end. Apple was already working on the iPhone, which would usher in the modern smartphone era. Intel turned down an opportunity to provide the processor for the iPhone, believing that Apple was unlikely to sell enough of them to justify the development costs. https://www.vox.com/2016/4/20/11463818/intel-iphone-mobile-revolution https://www.vox.com/2016/4/20/11463818/intel-iphone-mobile-r...
- LeifCarrotson 4y ago
  > 7 months before the iPhone was announced, but presumably way after work had started and Apple had asked Intel for a processor You say that as if Intel should have known that the iPhone would be an explosive hit. They probably assumed it would be yet another Blackberry competitor, not really a threat to their desktop hegemony.
  - helsinkiandrew 4y ago
    They didn't have to know that the iPhone would have been an explosive hit, but they should have seen that Smart Phone/PDA like device sales were increasing at 30-50% a year at that time, and there was a definite feeling that this was the future. Even if the iPhone wasn't an explosive hit and the smartphone growth didn't explode, 10% of Blackberries market would have meant millions of processors sold to Apple in the first years and any other Blackberry competitor that was interested,
    - marcosdumay 4y ago
      > there was a definite feeling that this was the future Some people thought that, yeah. But not everybody, and not on the same places Intel sold their chips to. Anyway, Intel sold their foundry exactly because its unitary profit was way too small for them. Since then, the company only got more expensive, so they wouldn't be able to keep it.
    - 4y ago
DeathArrow 4y ago
But Intel did respond with x86 SoCs for smartphones. Merrifield, Moorefield and Airmont.
- unethical_ban 4y ago
  I still have an Asus android tablet with an Intel CPU, circa 2014. It wasn't that great then and it deserves death now. Zero ability to upgrade or get third party OS on it due to those processors not taking off.
- Sohcahtoa82 4y ago
  And they were plagued with compatibility and performance problems. Almost bought my niece an Android tablet with an x86 CPU. They were priced super low. Turns out there was a reason for that. Apps ran like shit and any games written using the Android NDK just straight-up didn't work.
anecdotal1 4y ago
Intel actually designed a CPU for the iPhone. Apple didn't use it because it failed to meet their performance/thermal requirements. Intel was not happy about this.
- pavlov 4y ago
  Was it an x86 core rather than Xscale?
- sharedbeans 4y ago
  Sourcing for this? This is a very under-reported story IMO, the main source we have is self-serving comments from the guy who screwed it up saying “we passed because it wasn’t going to be profitable at the projected volumes”. But I don’t see how Intel would have even been capable of being the sort of partner that mobile SoC development requires.
  - anecdotal1 4y ago
    Consider this a rumor until I can remember the source. There was a deep dive article I came across about this a while ago and the only other interesting bits I've never seen anywhere else were tha - Intel was offering a chip based on core/atom and couldn't hit the required performance/TDP - apple wanted a custom chip meeting the required specs, but this is where Intel balked due to estimates of low demand to design and fab it - apple went with ARM and PowerVR GPU was an important part of this story Sometimes I wish I had a searchable full text index of articles I found interesting but didn't see value in bookmarking
    - bsnnkv 4y ago
      > Sometimes I wish I had a searchable full text index of articles I found interesting but didn't see value in bookmarking I hope you won't mind this reply that isn't related to the topic, but this part of your comment stood out to me. The way I get around this is by just saving the bits of articles I find interesting for later full-text search, and on the side I make topic-specific feeds of what I'm saving available via RSS for others to subscribe to.[1] This paradigm shift from saving/bookmarking entire articles to saving highlights has worked really well for me, maybe it could work for you? [1]: https://notado.app/feeds/jado https://notado.app/feeds/jado - I run the service my highlights and feeds are hosted on, but if you're not interested in a subscription service that does this I don't think it's particularly difficult to spin up something yourself over a weekend or two
omneity 4y ago
To me this seems to be an attempt to leverage their dominant position at the time to further strengthen it, and eventually failing to strong-arm the industry.
wmf 4y ago
Intel doesn't invest in anything besides x86. They let XScale languish while they owned it and even if the iPhone used XScale, Intel still would have found a reason to under-invest in it.
oblak 4y ago
It only cost Otellini his cushy job
maven29 4y ago
Blackberry phones peaked in 2009, there was plenty of time to reconsider. This is just blatant revisionism, there were plenty of on-ramp opportunities within the product timeline. Apple didn't move off Samsung entirely until the A8, and they still rely on many Samsung hardware IPs within the SoC to this day. It was not just a fab arrangement from day 1. https://twitter.com/calebccff/status/1472517091970494465 https://twitter.com/calebccff/status/1472517091970494465 Apple relied on many of the same suppliers as the rest of the industry for a very long time, except the ones they acquired and closed-off. Purely on a "rising tide lifts all boats basis", Intel would still have had access to the dominant player if the ARM-based touchscreen era wiped out the incumbents. However, this is still a very low-margin business, despite requiring more engineering effort than desktop. You could argue that $1500 phones were unthinkable at the time, but as a commodity, chipset manufacturers see less than 5-10% percent of that, even on flagship phones.
samstave 4y ago
Heh, I was at Intel in the late 90s when they were internally worried as heck of Transmeta (not in relation to LGBTQ or the company meta :-) https://www.zdnet.com/article/arm-shares-tumble-as-transmeta-readies-crusoe/ https://www.zdnet.com/article/arm-shares-tumble-as-transmeta... in 1997 Intel was terrified of Transmeta, and it lit a fire under their ass to get the Celeron out more quickly... Me and a colleague worked a F-ton to test out not only the Celeron, AGP, SIMD, OpenGL, Unreal Engine, and all the latest games... But Intel paid the game devs a Million Marketing bucks if they would optimize their games (and general software) to the SIMD instructions, to make the game feel more subjectively responsive on the Celeron as opposed to the AMD, and the seemingly incoming Transmeta. so I think that Transmeta was the big blunder, but in reverse ; ; Intel should have been all over gaming, and not been afraid of some plucky startup... But recall all the senior engineers at intel from <1995 had slide rules and pocket protectors.... they didnt see the entertainment wave of computing early enough and made far too many mistakes and tried to catch up.... personally, I think Linux saved Intel from bankruptcy.
- rjsw 4y ago
  Transmeta was attractive to embedded HW developers because it had a PCI host controller built in, you didn't need a separate northbridge chip, the speed was less important.
rjsw 4y ago
Xscale didn't have a GPU built into the SoC.
TradingPlaces 4y ago
It’s worse than that. Apple had just switched PPC to Intel, and Jobs approached Intel in 2005 to make the iPhone SoC. From Paul Otellini exit interview in 2013 >"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… 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.” The title of the article is "Paul Otellini's Intel: Can the Company That Built the Future Survive It?” and that is still a good question a decade later. https://archive.is/B0Bbs https://archive.is/B0Bbs
- ksec 4y ago
  Well that is Intel’s view. Inside Apple their engineers refuse to use anything Intel and threaten Jobs to quit.

by pavlov 4y ago

baybal2 4y ago

Non-touchscreen smartphone boom been going for years prior. The problem was that embedded OS-es like Symbian, A200, PalmOS were running circles around Windows Mobile. Most of them used Samsung SoCs which were few times slower than StrongARM. StrongARM was seen exclusively in the context of it being used to "lift" extremely bloated WinMo smartphones, and was otherwise thought as an overkill for other uses.

baq 4y ago

The biggest mistake of Paul Ottelini for sure. The world would look very, very different if he said yes.

lr1970 4y ago
Before becoming Intel's CEO Paul Otellini served as executive VP of sales and marketing. This uber-blunder is a great example what happens when you let a "bean-counter" run a tech company. EDIT: corrected factual error. Paul was never a CFO but much of his career was in sales and marketing. Sales do count as "bean-counters" because their main metric are counting PaL.
- klelatti 4y ago
  That's not correct. Otellini did not serve as CFO at any time and did not have a finance background. Please check your facts before making a comment like this. Edit: I see you've changed your comment without acknowledgment. Still wrong 'sales and marketing' isn't 'bean counting' and Otellini had extensive 'tech' experience.
  - lr1970 4y ago
    Thanks for pointing out a factual error. I corrected it and added explicit EDIT paragraph.
- voidfunc 4y ago
  Have their been any successful major companies run by former CFOs? My experience here is that it is often a death sentence via a long road or stagnation.
- bushbaba 4y ago
  Disagree. The Sales leaders are generally also looking for continued growth 3 years out. Sales know there’s sprints but you are also running a marathon where continued growth YoY is expected. They should have seen the smartphone potential and started chipping away to grow their base long term. Similar to why the best sales leaders only do deals where there’s renewal possibilities in 2-3 years out.
- svnt 4y ago
  I mean you should probably just own the whole mistake — in no world are bean-counters sales people. https://dictionary.cambridge.org/dictionary/english/bean-counter https://dictionary.cambridge.org/dictionary/english/bean-cou...
- bee_rider 4y ago
  Some of their worst years were under Krzanich, who had an engineering background… I think it is hard to guess who’ll be a good CEO for a tech company. Someone like Lisa Su with a background in engineering but also lots of R&D seems like the best pick. The CEO doesn’t need to do the i-dotting, t-crossing engineering stuff anyway, having a good idea conceptual of what is upcoming and possible is more important.
  - TylerE 4y ago
    Seems like what you need is a triumvirate... an idea guy (The Jobs), a tech guy (The Wozniak), and a 3rd person who's main job is to keep the first two from killing each other, and ideally a sense for operations and PR.
    - mepian 4y ago
      Jobs wasn't too bad at tech, he passed Al Alcorn's job interview at Atari after all.
    - corford 4y ago
      Probably "The Eric Schmidt" would be that third person

helsinkiandrew 4y ago

Xscale sale was announced 7 months before the iPhone was announced, but presumably way after work had started and Apple had asked Intel for a processor. A truly poor decision. > There was just one problem: The PC era was about to end. Apple was already working on the iPhone, which would usher in the modern smartphone era. Intel turned down an opportunity to provide the processor for the iPhone, believing that Apple was unlikely to sell enough of them to justify the development costs. https://www.vox.com/2016/4/20/11463818/intel-iphone-mobile-revolution https://www.vox.com/2016/4/20/11463818/intel-iphone-mobile-r...

LeifCarrotson 4y ago
> 7 months before the iPhone was announced, but presumably way after work had started and Apple had asked Intel for a processor You say that as if Intel should have known that the iPhone would be an explosive hit. They probably assumed it would be yet another Blackberry competitor, not really a threat to their desktop hegemony.
- helsinkiandrew 4y ago
  They didn't have to know that the iPhone would have been an explosive hit, but they should have seen that Smart Phone/PDA like device sales were increasing at 30-50% a year at that time, and there was a definite feeling that this was the future. Even if the iPhone wasn't an explosive hit and the smartphone growth didn't explode, 10% of Blackberries market would have meant millions of processors sold to Apple in the first years and any other Blackberry competitor that was interested,
  - marcosdumay 4y ago
    > there was a definite feeling that this was the future Some people thought that, yeah. But not everybody, and not on the same places Intel sold their chips to. Anyway, Intel sold their foundry exactly because its unitary profit was way too small for them. Since then, the company only got more expensive, so they wouldn't be able to keep it.
  - 4y ago

DeathArrow 4y ago

But Intel did respond with x86 SoCs for smartphones. Merrifield, Moorefield and Airmont.

unethical_ban 4y ago
I still have an Asus android tablet with an Intel CPU, circa 2014. It wasn't that great then and it deserves death now. Zero ability to upgrade or get third party OS on it due to those processors not taking off.
Sohcahtoa82 4y ago
And they were plagued with compatibility and performance problems. Almost bought my niece an Android tablet with an x86 CPU. They were priced super low. Turns out there was a reason for that. Apps ran like shit and any games written using the Android NDK just straight-up didn't work.

anecdotal1 4y ago

Intel actually designed a CPU for the iPhone. Apple didn't use it because it failed to meet their performance/thermal requirements. Intel was not happy about this.

pavlov 4y ago
Was it an x86 core rather than Xscale?
sharedbeans 4y ago
Sourcing for this? This is a very under-reported story IMO, the main source we have is self-serving comments from the guy who screwed it up saying “we passed because it wasn’t going to be profitable at the projected volumes”. But I don’t see how Intel would have even been capable of being the sort of partner that mobile SoC development requires.
- anecdotal1 4y ago
  Consider this a rumor until I can remember the source. There was a deep dive article I came across about this a while ago and the only other interesting bits I've never seen anywhere else were tha - Intel was offering a chip based on core/atom and couldn't hit the required performance/TDP - apple wanted a custom chip meeting the required specs, but this is where Intel balked due to estimates of low demand to design and fab it - apple went with ARM and PowerVR GPU was an important part of this story Sometimes I wish I had a searchable full text index of articles I found interesting but didn't see value in bookmarking
  - bsnnkv 4y ago
    > Sometimes I wish I had a searchable full text index of articles I found interesting but didn't see value in bookmarking I hope you won't mind this reply that isn't related to the topic, but this part of your comment stood out to me. The way I get around this is by just saving the bits of articles I find interesting for later full-text search, and on the side I make topic-specific feeds of what I'm saving available via RSS for others to subscribe to.[1] This paradigm shift from saving/bookmarking entire articles to saving highlights has worked really well for me, maybe it could work for you? [1]: https://notado.app/feeds/jado https://notado.app/feeds/jado - I run the service my highlights and feeds are hosted on, but if you're not interested in a subscription service that does this I don't think it's particularly difficult to spin up something yourself over a weekend or two

omneity 4y ago

To me this seems to be an attempt to leverage their dominant position at the time to further strengthen it, and eventually failing to strong-arm the industry.

wmf 4y ago

Intel doesn't invest in anything besides x86. They let XScale languish while they owned it and even if the iPhone used XScale, Intel still would have found a reason to under-invest in it.

oblak 4y ago

It only cost Otellini his cushy job

maven29 4y ago

Blackberry phones peaked in 2009, there was plenty of time to reconsider. This is just blatant revisionism, there were plenty of on-ramp opportunities within the product timeline. Apple didn't move off Samsung entirely until the A8, and they still rely on many Samsung hardware IPs within the SoC to this day. It was not just a fab arrangement from day 1. https://twitter.com/calebccff/status/1472517091970494465 https://twitter.com/calebccff/status/1472517091970494465 Apple relied on many of the same suppliers as the rest of the industry for a very long time, except the ones they acquired and closed-off. Purely on a "rising tide lifts all boats basis", Intel would still have had access to the dominant player if the ARM-based touchscreen era wiped out the incumbents. However, this is still a very low-margin business, despite requiring more engineering effort than desktop. You could argue that $1500 phones were unthinkable at the time, but as a commodity, chipset manufacturers see less than 5-10% percent of that, even on flagship phones.

samstave 4y ago

Heh, I was at Intel in the late 90s when they were internally worried as heck of Transmeta (not in relation to LGBTQ or the company meta :-) https://www.zdnet.com/article/arm-shares-tumble-as-transmeta-readies-crusoe/ https://www.zdnet.com/article/arm-shares-tumble-as-transmeta... in 1997 Intel was terrified of Transmeta, and it lit a fire under their ass to get the Celeron out more quickly... Me and a colleague worked a F-ton to test out not only the Celeron, AGP, SIMD, OpenGL, Unreal Engine, and all the latest games... But Intel paid the game devs a Million Marketing bucks if they would optimize their games (and general software) to the SIMD instructions, to make the game feel more subjectively responsive on the Celeron as opposed to the AMD, and the seemingly incoming Transmeta. so I think that Transmeta was the big blunder, but in reverse ; ; Intel should have been all over gaming, and not been afraid of some plucky startup... But recall all the senior engineers at intel from <1995 had slide rules and pocket protectors.... they didnt see the entertainment wave of computing early enough and made far too many mistakes and tried to catch up.... personally, I think Linux saved Intel from bankruptcy.

rjsw 4y ago
Transmeta was attractive to embedded HW developers because it had a PCI host controller built in, you didn't need a separate northbridge chip, the speed was less important.

rjsw 4y ago

Xscale didn't have a GPU built into the SoC.

TradingPlaces 4y ago

It’s worse than that. Apple had just switched PPC to Intel, and Jobs approached Intel in 2005 to make the iPhone SoC. From Paul Otellini exit interview in 2013 >"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… 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.” The title of the article is "Paul Otellini's Intel: Can the Company That Built the Future Survive It?” and that is still a good question a decade later. https://archive.is/B0Bbs https://archive.is/B0Bbs

ksec 4y ago
Well that is Intel’s view. Inside Apple their engineers refuse to use anything Intel and threaten Jobs to quit.