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> 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

> 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.
- gumby 4y ago
  I don't want to defend Intel, but Apple's own announced hope at the time of the iphone introduction was to "eventually reach 1% of the phone market".
  - Nevermark 4y ago
    Apple was just reassuring customers and the market, by telling them that their tiny size and newbie market status was an advantage, not a disadvantage. But they clearly had high ambitions for their new revolutionary ergonomic mobile "phone" + "music player" + "internet". They wanted to define a new indispensable market and they wanted to own it. They already had a multi-year product path and design pipeline for regular major upgrades in place. The iPhone was intended to be a "next big thing" from the start. And it seems unlikely Steve was selling Intel on doing a new chip for 1% of the phone market. He was telling Intel this was the future, in some form. Apple was an objective market demonstration, with no ambiguity, that there was now a need for low-power first (as apposed to speed first) that would got to other suppliers if Intel didn't move. This was a leadership failure at Intel. They happen.
    - hollerith 4y ago
      I always thought it was a response to other cell-phone makers integrating music-player functionality into their cell phones, threatening Apple's music-player revenue stream.
      - gumby 4y ago
        Me too. Ballmer's reaction to the iphone was not obviously stupid at the time, especially given Microsft's business model of direct enterprise sales.
sumtechguy 4y ago
That at that time would not have been a bad take. The big telcos were handing out data in miserly amounts and eye bleeding prices (think 50 bucks for 1MB then another 30-50 for SMS). AT&T was willing to pair with an unlimited plan set the iPhone wildly ahead of all the other phones in that category. VZ messed up big on that one. They were touting how amazing their network was meanwhile their competition was letting people surf the net from their phone. VZ was meanwhile still charging silly rates for SMS. Meanwhile I could open a connection on an iPhone and use an online chat service or the unlimited SMS. All of the other phones from that time could do similar things. It was the per month charge that people balked at to do simple internet things. Then on top of that it was apple so it had a bit of cool to go with it. I personally think though without that data plan the thing would have been a dud.
- nordsieck 4y ago
  > The big telcos were handing out data in miserly amounts and eye bleeding prices (think 50 bucks for 1MB then another 30-50 for SMS). AT&T was willing to pair with an unlimited plan set the iPhone wildly ahead of all the other phones in that category. From what I recall, the original iPhone only supported 2G, while contemporary phones supported 3G. I remember a lot of criticism around the iPhone web experience because of that, even though the interface was clearly superior to everyone who used it. It looks like there were relatively competitive data plans available[1] that offered unlimited data. I'm not really convinced that that was the problem. --- 1. https://arstechnica.com/gadgets/2007/04/data-plans-the-barrier-to-mobile-internet-adoption/ https://arstechnica.com/gadgets/2007/04/data-plans-the-barri...
  - colejohnson66 4y ago
    > From what I recall, the original iPhone only supported 2G, while contemporary phones supported 3G. Yep. Only EDGE and quad-band GSM ("2G"). The second generation iPhone was called the "iPhone 3G" specifically because it supported tri-band UMTS ("3G") with HSDPA. In fact, some even back-named the first generation iPhone to "iPhone 2G".
faeriechangling 4y ago
Think of why the iPhone existed in the first place. It was because Jobs saw the writing on the wall and knew that cell phones were bound to destroy the market for the iPod, Apple's moneymaker. Before making the iPhone, he made the Rokr and Jobs threw massive amounts of resources into the iPhone at large risk to Apple. He bought up the patent for multi touch back in 2005. I honestly think people overlook this aspect of Jobs leadership, basically from the time he returned on Apple he doubled down on mobile computing repeatedly throwing 50% of Apple's marketing budget into the unproven iPod for instance. Why was Jobs able to see the writing on the wall and not Intel? I think Steve Jobs himself said it best: https://www.youtube.com/watch?v=P4VBqTViEx4 https://www.youtube.com/watch?v=P4VBqTViEx4 Intel itself was NOT totally blindsided by the mobile revolution. Intel Atom development started in 2004. Intel Atom could have dominated the market. There were Intel Execs pushing Atom. But all the R&D was pumped into the desktop and server business, the quality silicon was reserved for the desktop and server business, Intels execs didn't want these inexpensive chips for what were presumed to be peoples secondary computers to cannibalise its expensive desktop and server chips, and the strategic vision was simply bad. You can apologise for it but the mistake may have doomed the entire business and plenty of companies did not make the same mistake. Intel wouldn't even exist if they didn't already make such a shift away from the memory market into the microprocessor market firing most of the their company in the process. Intel had leaders with strategic vision and guts back in the day, and the senior leadership simply weren't good enough to commit to mobile when that bridge had to be crossed.
- friendzis 4y ago
  > Intel Atom could have dominated the market Depends on what you call Atom, but if you mean Atom as it was released then absolutely no, it had exactly zero fighting chance. IIRC first Atoms were Pentium 4 or so fabricated on smaller process and resulting in lower power draw. The only meaningful use for early Atoms was crappy netbooks. However, it was or could have been an important stepping stone for paving the road towards x86-based low power devices. Remember, it was also a time where linux-on-arm started booming. It could have been an alternative to ARM SoCs, but there were simply too little attractive offerings and Broadcom/Freescale/Ti effectively ate the market

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.
gumby 4y ago
I don't want to defend Intel, but Apple's own announced hope at the time of the iphone introduction was to "eventually reach 1% of the phone market".
- Nevermark 4y ago
  Apple was just reassuring customers and the market, by telling them that their tiny size and newbie market status was an advantage, not a disadvantage. But they clearly had high ambitions for their new revolutionary ergonomic mobile "phone" + "music player" + "internet". They wanted to define a new indispensable market and they wanted to own it. They already had a multi-year product path and design pipeline for regular major upgrades in place. The iPhone was intended to be a "next big thing" from the start. And it seems unlikely Steve was selling Intel on doing a new chip for 1% of the phone market. He was telling Intel this was the future, in some form. Apple was an objective market demonstration, with no ambiguity, that there was now a need for low-power first (as apposed to speed first) that would got to other suppliers if Intel didn't move. This was a leadership failure at Intel. They happen.
  - hollerith 4y ago
    I always thought it was a response to other cell-phone makers integrating music-player functionality into their cell phones, threatening Apple's music-player revenue stream.
    - gumby 4y ago
      Me too. Ballmer's reaction to the iphone was not obviously stupid at the time, especially given Microsft's business model of direct enterprise sales.

sumtechguy 4y ago

That at that time would not have been a bad take. The big telcos were handing out data in miserly amounts and eye bleeding prices (think 50 bucks for 1MB then another 30-50 for SMS). AT&T was willing to pair with an unlimited plan set the iPhone wildly ahead of all the other phones in that category. VZ messed up big on that one. They were touting how amazing their network was meanwhile their competition was letting people surf the net from their phone. VZ was meanwhile still charging silly rates for SMS. Meanwhile I could open a connection on an iPhone and use an online chat service or the unlimited SMS. All of the other phones from that time could do similar things. It was the per month charge that people balked at to do simple internet things. Then on top of that it was apple so it had a bit of cool to go with it. I personally think though without that data plan the thing would have been a dud.

nordsieck 4y ago
> The big telcos were handing out data in miserly amounts and eye bleeding prices (think 50 bucks for 1MB then another 30-50 for SMS). AT&T was willing to pair with an unlimited plan set the iPhone wildly ahead of all the other phones in that category. From what I recall, the original iPhone only supported 2G, while contemporary phones supported 3G. I remember a lot of criticism around the iPhone web experience because of that, even though the interface was clearly superior to everyone who used it. It looks like there were relatively competitive data plans available[1] that offered unlimited data. I'm not really convinced that that was the problem. --- 1. https://arstechnica.com/gadgets/2007/04/data-plans-the-barrier-to-mobile-internet-adoption/ https://arstechnica.com/gadgets/2007/04/data-plans-the-barri...
- colejohnson66 4y ago
  > From what I recall, the original iPhone only supported 2G, while contemporary phones supported 3G. Yep. Only EDGE and quad-band GSM ("2G"). The second generation iPhone was called the "iPhone 3G" specifically because it supported tri-band UMTS ("3G") with HSDPA. In fact, some even back-named the first generation iPhone to "iPhone 2G".

faeriechangling 4y ago

Think of why the iPhone existed in the first place. It was because Jobs saw the writing on the wall and knew that cell phones were bound to destroy the market for the iPod, Apple's moneymaker. Before making the iPhone, he made the Rokr and Jobs threw massive amounts of resources into the iPhone at large risk to Apple. He bought up the patent for multi touch back in 2005. I honestly think people overlook this aspect of Jobs leadership, basically from the time he returned on Apple he doubled down on mobile computing repeatedly throwing 50% of Apple's marketing budget into the unproven iPod for instance. Why was Jobs able to see the writing on the wall and not Intel? I think Steve Jobs himself said it best: https://www.youtube.com/watch?v=P4VBqTViEx4 https://www.youtube.com/watch?v=P4VBqTViEx4 Intel itself was NOT totally blindsided by the mobile revolution. Intel Atom development started in 2004. Intel Atom could have dominated the market. There were Intel Execs pushing Atom. But all the R&D was pumped into the desktop and server business, the quality silicon was reserved for the desktop and server business, Intels execs didn't want these inexpensive chips for what were presumed to be peoples secondary computers to cannibalise its expensive desktop and server chips, and the strategic vision was simply bad. You can apologise for it but the mistake may have doomed the entire business and plenty of companies did not make the same mistake. Intel wouldn't even exist if they didn't already make such a shift away from the memory market into the microprocessor market firing most of the their company in the process. Intel had leaders with strategic vision and guts back in the day, and the senior leadership simply weren't good enough to commit to mobile when that bridge had to be crossed.

friendzis 4y ago
> Intel Atom could have dominated the market Depends on what you call Atom, but if you mean Atom as it was released then absolutely no, it had exactly zero fighting chance. IIRC first Atoms were Pentium 4 or so fabricated on smaller process and resulting in lower power draw. The only meaningful use for early Atoms was crappy netbooks. However, it was or could have been an important stepping stone for paving the road towards x86-based low power devices. Remember, it was also a time where linux-on-arm started booming. It could have been an alternative to ARM SoCs, but there were simply too little attractive offerings and Broadcom/Freescale/Ti effectively ate the market