Former Intel CEO Regrets Passing Up on iPhone Gravy Train
May 17, 2013 11:46 AM
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He said he should have listened to his gut
Former Intel CEO and longtime employee Paul Otellini
had his last day yesterday, and after 40 years of employment with the chipmaker, his only major regret was
missing out on the iPhone
Otellini, who became Intel CEO in 2005, said he was disappointed that he passed up the opportunity for Intel to make chips for the iPhone back before the device's 2007 release. It was his one truly regretful moment during his long career with Intel, and the one time he decided not to go with his gut instinct.
"We ended up not winning it or passing on it, depending on how you want to view it," said Otellini. "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."
Apple's early iPhones ended up having processors made by Intel's rival, ARM. ARM certainly jumped on the mobile processor bandwagon quickly, making the crucial transition from traditional PCs to the exploding mobile sector.
"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," said Otellini. "My gut told me to say yes."
While Samsung (Apple's main hardware rival in the mobile industry) has been
manufacturing most of Apple's smartphone and tablet processors
for years, the two are looking to split after nasty patent wars and increased competition have broke out between the two.
At the Consumer Electronics Show (CES) earlier this year, Samsung's President of LSI business Stephen Woo said that it's crucial for the South Korean electronics maker to focus on alternatives to Apple when it comes to the chip sector.
This being the case,
Apple has reportedly been in talks with Intel
again to manufacture its chips for iPhones and iPads. This could lessen Apple's reliance on Samsung and help Intel leap further into the mobile processing sector.
Otellini joined Intel in 1974. He was appointed to senior vice president and general manager of sales and marketing from 1994-1996 and then executive vice president of sales and marketing from 1996-1998. He became executive vice president and general manager of the Intel Architecture Group from 1998-2002.
announced his retirement in November 2012
. Earlier this month, Brian Krzanich was named the new CEO.
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Happens all the time
5/17/2013 3:01:58 PM
I've seen this type of thing before. It's the mark of leadership out of touch with reality--grounded in the past--and lacking a clear vision for the future. It's the reason Hoover snubbed Dyson & ended up losing a lawsuit when it tried to blatantly steal Dyson's technology. The then CEO of Hoover stated that he wished they'd bought Dyson's patent, just so they could have mothballed it & kept the status-quo.
Companies need to die off when they lose touch with consumer trends. Best-buy missed the boat for online sales by about 10 years (even despite having an online presence). EA and Dell are learning the same lesson. I won't cry for any of them. The beauty of capitalism is that every time a company dies, more will rise to fill any unmet consumer demands.
is why we should never offer tax incentives to businesses--past the initial entrepreneur phase.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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