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I worked for an Intel spinoff whose CEO was a former high-level Intel exec from the 1990-2010 era. Internal goss attributed much of Intel's decision to stay out

I worked for an Intel spinoff whose CEO was a former high-level Intel exec from the 1990-2010 era. Internal goss attributed much of Intel's decision to stay out of the iPhone to him... there was a supposed quote that went something like "we make chips for computers, not g*d** telephones!" As the tale went, he was sent out to this doomed-from-birth spinoff as a "sunset cruise" to basically force him into retirement (for this bad decision) without the bad publicity of a public head-chopping.

MrBuddyCasino 2y ago
I still don’t understand why people make such a big deal out of „missing the iPhone“. There was no money in mobile SoCs, and there still isn’t. Apple makes their own chips anyway! Intel was right to focus on the x86.
- PopePompus 2y ago
  Well volume is an issue. Even a low margin part which has very high volume sales can help you afford to build leading edge Fabs, and keep process technology leadership.
- m_mueller 2y ago
  I think TSMC, ASML and ARM are making quite good money on the iPhone. And so did Samsung for a while before the Apple A4 came out.
- klelatti 2y ago
  Apple doesn't make their own chips TSMC does and TSMC generated net income of US$26 billion in 2023.
  - MrBuddyCasino 2y ago
    That is actually a good point - the fab process would turn out to become another weak point (besides the missing moat of ARM) of Intel. There is no way Apple would watch TSMCs leadership year after year and still stick with Intel fabs.
    - rsynnott 2y ago
      Definitely not; at one point the iPhone chip was actually dual-sourced! https://www.anandtech.com/show/9708/analyzing-apple-statement-for-tsmc-and-samsung-a9 https://www.anandtech.com/show/9708/analyzing-apple-statemen...
      - MBCook 2y ago
        Apple hates being beholden to one company. It’s bitten them many times in the past. I suspect if anyone else could keep up with TSMC Apple would still dual source. But between their lead and the benefits of being such a big customer they get first crack at the cutting edge stuff, single sourcing manufacturing probably makes the most sense. And their interests are aligned, unlike their dependencies on MS/Adobe/Motorola/IBM/Intel.
- sholladay 2y ago
  Apple designs their own chips, but they don’t make them. In any other context, that might be splitting hairs but it’s a meaningful distinction in this conversation.
  - pests 2y ago
    I think it's still splitting hairs. Even though I sent my prints out to be printed by shapeways or whatever, I still tell people "I made" those parts.
    - zamfi 2y ago
      The point here is that there is tons of money to be made in manufacturing those chips that Intel lost out on by ignoring mobile. That “Apple makes their own chips” does not alone mean Intel could not have profited from this — as indeed TSMC, ASML, and ARM are.
    - kaibee 2y ago
      This analysis misses kinda a major point. The nice thing about making mobile SOCs is that the yields are more forgiving. If you have 1000mm^2 of silicon that you're slicing into 10mm^2 dies, each defect (of which there will be many on early leading nodes), will only cost you a 10mm^2 chip, instead of a 50mm^2 chip. And because you're making them in volume, you get many many cycles to improve your process before you try to make bigger chips with it, ie: CPUs/GPUs. And because Apple wanted the increased performance/battery life, they reserved capacity from TSMC on these leading nodes in advance, helping to finance their development while providing a garunteed customer that was going to buy in volume. This gave TSMC a huuuge advantage over Intel that materialzied around ~2018.
  - GeekyBear 2y ago
    Apple designs their own chips now. but the original iPhone, used a Samsung chip. Intel didn't just miss out on business as a fab, Apple would have used their chip design as well. Which leads you to wonder if Apple still would have begun designing chips themselves, if Intel had put some real effort into designing mobile chips.
- aa-jv 2y ago
  >"Apple makes their own chips anyway!" Apple can only do that now, because of the billions they have made on the iPhone, plain and simple. And - more importantly - they were well geared to do that, since the beginning of computing. There being no money in SoC's, is because they're all being made across the other side of the planet, mostly, from the intended final users. If Intel were really 'leading edge', they'd have made desk-side custom fabrication a thing in the makerspace already. Such that I can, as a computer user, print 10 or 20 or X little chips, for my own specific purposes, non-mass-market. This would be a truly revolutionary adventure from a 'grandfather of computing' style company. Alas, the x86 is, indeed, everywhere. Grandfather Intel has a massive garden. If only the SoC battles were truly localized, and a real computing revolution can happen (before its too late). You should have a locally-built device in your hand.
- jorvi 2y ago
  > There was no money in mobile SoCs, and there still isn’t Qualcomm market cap: $193 billion TSMC market cap: $888 billion Seems designing and fabbing SoCs is plenty valuable
  - adventured 2y ago
    > TSMC market cap: $25 billion Taiwan Semi's market cap is $888 billion. They're - remarkably - now worth 10x what Intel is.
    - jorvi 2y ago
      Huh, you are right. I already had a feeling it was suspiciously low. I'll correct it, thanks!
- razakel 2y ago
  But it proved ARM had a mature ecosystem with lots of developers...
- dagmx 2y ago
  Apple designs their own chips now. They didn’t for a good many years. Intel could have moved big volumes during that period. At the very least they could have been a fab. They also largely switched to their own chips because vendors weren’t meeting their needs. Again, Intel could have staved it off on both computers and phones if they didn’t mess up so badly on delivery over the last several years.
- xt00 2y ago
  Yea it definitely felt like at the time Intel was in a tough spot.. while the article is stating that the narrative about the margins being narrow for arm chips so Intel was nervous about the area, one thing I can attest to is that even if that narrative was false when it comes to Apple, competitors of Apple at the time definitely would be assuming that if Intel went into that space that they gave Apple a good price, so just the perception of them selling a good chip to Apple could have hurt Intel's fat profit margins. Like Apple was selling phones for the same price Intel was selling chips for -- so maybe the higher cost could be justified by Apple who knows, but the perception of Intel's profit margin they are willing to live with impacts their negotiations with other customers dramatically as well.
bschmidt1 2y ago
When I think back to that time period (serving tables, T9 texting in my apron on my Blackberry Pearl lol) I remember the touch screen being a tough learning curve for the majority of people. The first iPhone was also gigantic, hideous, couldn't send pictures - something even a cheap $20 Samsung from the carrier could do - and it also didn't sell very well. People were more into "The Google phone", the Sidekiq, or the latest Razr. Think it wasn't til the 3GS came out with a ton of marketing push that it started to gain popularity, and it ended up having more to do with the App Store than the hardware - people did not like those touch screens for the first several years of smartphones. They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior. I think the App Store resonated a lot more with people back then rather than the iPhone as a device. MySpace was still around, the Bush-era recession had everyone looking for a side hustle. Most young/ambitious people I was around in "tech" (which was effectively HTML-based SEO and WordPress design) had a Blackberry and a side business. This kid I worked with became "rich" from an iPhone app that just combined other iPhone apps haha. Loved that time period. Graffitio! Would have been very hard to predict the success of the iPhone, even as I was already entering orders for customers on a fully touch screen Aloha point-of-sale long before iPhone.
- WheatMillington 2y ago
  This is a giant bit of revisionist history. The first iPhone was an immediate success and a massive seller.
- Analemma_ 2y ago
  To be honest, I think you're badly misremembering that era. People were calling the iPhone "the Jesus Phone" after the original keynote announcement, the lines on launch day were around the block, and upon release, there were definitely tons of flame wars around physical vs. touchscreen keyboards but there was a widespread consensus that the iPhone's predictive typing correction was pretty good and that the touchscreen was miles ahead of any similar-equipped phone (many of which were still resistive, ugh!). It definitely didn't get mainstream popularity until the 3GS/4 and the App Store, but people were definitely interested from day 1. Don't forget that early builds of Android looked much more like a Blackberry clone until the iPhone was announced, and then Google immediately scrapped everything and rewrote it from the ground up to be iPhone-like.

MrBuddyCasino 2y ago

I still don’t understand why people make such a big deal out of „missing the iPhone“. There was no money in mobile SoCs, and there still isn’t. Apple makes their own chips anyway! Intel was right to focus on the x86.

PopePompus 2y ago
Well volume is an issue. Even a low margin part which has very high volume sales can help you afford to build leading edge Fabs, and keep process technology leadership.
m_mueller 2y ago
I think TSMC, ASML and ARM are making quite good money on the iPhone. And so did Samsung for a while before the Apple A4 came out.
klelatti 2y ago
Apple doesn't make their own chips TSMC does and TSMC generated net income of US$26 billion in 2023.
- MrBuddyCasino 2y ago
  That is actually a good point - the fab process would turn out to become another weak point (besides the missing moat of ARM) of Intel. There is no way Apple would watch TSMCs leadership year after year and still stick with Intel fabs.
  - rsynnott 2y ago
    Definitely not; at one point the iPhone chip was actually dual-sourced! https://www.anandtech.com/show/9708/analyzing-apple-statement-for-tsmc-and-samsung-a9 https://www.anandtech.com/show/9708/analyzing-apple-statemen...
    - MBCook 2y ago
      Apple hates being beholden to one company. It’s bitten them many times in the past. I suspect if anyone else could keep up with TSMC Apple would still dual source. But between their lead and the benefits of being such a big customer they get first crack at the cutting edge stuff, single sourcing manufacturing probably makes the most sense. And their interests are aligned, unlike their dependencies on MS/Adobe/Motorola/IBM/Intel.
sholladay 2y ago
Apple designs their own chips, but they don’t make them. In any other context, that might be splitting hairs but it’s a meaningful distinction in this conversation.
- pests 2y ago
  I think it's still splitting hairs. Even though I sent my prints out to be printed by shapeways or whatever, I still tell people "I made" those parts.
  - zamfi 2y ago
    The point here is that there is tons of money to be made in manufacturing those chips that Intel lost out on by ignoring mobile. That “Apple makes their own chips” does not alone mean Intel could not have profited from this — as indeed TSMC, ASML, and ARM are.
  - kaibee 2y ago
    This analysis misses kinda a major point. The nice thing about making mobile SOCs is that the yields are more forgiving. If you have 1000mm^2 of silicon that you're slicing into 10mm^2 dies, each defect (of which there will be many on early leading nodes), will only cost you a 10mm^2 chip, instead of a 50mm^2 chip. And because you're making them in volume, you get many many cycles to improve your process before you try to make bigger chips with it, ie: CPUs/GPUs. And because Apple wanted the increased performance/battery life, they reserved capacity from TSMC on these leading nodes in advance, helping to finance their development while providing a garunteed customer that was going to buy in volume. This gave TSMC a huuuge advantage over Intel that materialzied around ~2018.
- GeekyBear 2y ago
  Apple designs their own chips now. but the original iPhone, used a Samsung chip. Intel didn't just miss out on business as a fab, Apple would have used their chip design as well. Which leads you to wonder if Apple still would have begun designing chips themselves, if Intel had put some real effort into designing mobile chips.
aa-jv 2y ago
>"Apple makes their own chips anyway!" Apple can only do that now, because of the billions they have made on the iPhone, plain and simple. And - more importantly - they were well geared to do that, since the beginning of computing. There being no money in SoC's, is because they're all being made across the other side of the planet, mostly, from the intended final users. If Intel were really 'leading edge', they'd have made desk-side custom fabrication a thing in the makerspace already. Such that I can, as a computer user, print 10 or 20 or X little chips, for my own specific purposes, non-mass-market. This would be a truly revolutionary adventure from a 'grandfather of computing' style company. Alas, the x86 is, indeed, everywhere. Grandfather Intel has a massive garden. If only the SoC battles were truly localized, and a real computing revolution can happen (before its too late). You should have a locally-built device in your hand.
jorvi 2y ago
> There was no money in mobile SoCs, and there still isn’t Qualcomm market cap: $193 billion TSMC market cap: $888 billion Seems designing and fabbing SoCs is plenty valuable
- adventured 2y ago
  > TSMC market cap: $25 billion Taiwan Semi's market cap is $888 billion. They're - remarkably - now worth 10x what Intel is.
  - jorvi 2y ago
    Huh, you are right. I already had a feeling it was suspiciously low. I'll correct it, thanks!
razakel 2y ago
But it proved ARM had a mature ecosystem with lots of developers...
dagmx 2y ago
Apple designs their own chips now. They didn’t for a good many years. Intel could have moved big volumes during that period. At the very least they could have been a fab. They also largely switched to their own chips because vendors weren’t meeting their needs. Again, Intel could have staved it off on both computers and phones if they didn’t mess up so badly on delivery over the last several years.
xt00 2y ago
Yea it definitely felt like at the time Intel was in a tough spot.. while the article is stating that the narrative about the margins being narrow for arm chips so Intel was nervous about the area, one thing I can attest to is that even if that narrative was false when it comes to Apple, competitors of Apple at the time definitely would be assuming that if Intel went into that space that they gave Apple a good price, so just the perception of them selling a good chip to Apple could have hurt Intel's fat profit margins. Like Apple was selling phones for the same price Intel was selling chips for -- so maybe the higher cost could be justified by Apple who knows, but the perception of Intel's profit margin they are willing to live with impacts their negotiations with other customers dramatically as well.

bschmidt1 2y ago

When I think back to that time period (serving tables, T9 texting in my apron on my Blackberry Pearl lol) I remember the touch screen being a tough learning curve for the majority of people. The first iPhone was also gigantic, hideous, couldn't send pictures - something even a cheap $20 Samsung from the carrier could do - and it also didn't sell very well. People were more into "The Google phone", the Sidekiq, or the latest Razr. Think it wasn't til the 3GS came out with a ton of marketing push that it started to gain popularity, and it ended up having more to do with the App Store than the hardware - people did not like those touch screens for the first several years of smartphones. They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior. I think the App Store resonated a lot more with people back then rather than the iPhone as a device. MySpace was still around, the Bush-era recession had everyone looking for a side hustle. Most young/ambitious people I was around in "tech" (which was effectively HTML-based SEO and WordPress design) had a Blackberry and a side business. This kid I worked with became "rich" from an iPhone app that just combined other iPhone apps haha. Loved that time period. Graffitio! Would have been very hard to predict the success of the iPhone, even as I was already entering orders for customers on a fully touch screen Aloha point-of-sale long before iPhone.

WheatMillington 2y ago
This is a giant bit of revisionist history. The first iPhone was an immediate success and a massive seller.
Analemma_ 2y ago
To be honest, I think you're badly misremembering that era. People were calling the iPhone "the Jesus Phone" after the original keynote announcement, the lines on launch day were around the block, and upon release, there were definitely tons of flame wars around physical vs. touchscreen keyboards but there was a widespread consensus that the iPhone's predictive typing correction was pretty good and that the touchscreen was miles ahead of any similar-equipped phone (many of which were still resistive, ugh!). It definitely didn't get mainstream popularity until the 3GS/4 and the App Store, but people were definitely interested from day 1. Don't forget that early builds of Android looked much more like a Blackberry clone until the iPhone was announced, and then Google immediately scrapped everything and rewrote it from the ground up to be iPhone-like.