Intel CEO Otellini: We’ll build chips Apple ‘can’t ignore,’ for iPad and iPhone

“Intel outlined its plan to catch up in the smartphone processor business at its annual investor day in Santa Clara, California, Thursday: crush competitors with the weight of its multi-billion-dollar fabs and the thousands of developers it can throw at the problem of tuning mobile software to run on its processors,” Brian Caulfield reports for Forbes.

“The goal: keep the attention of key customers such as Apple as smartphones, tablets, and personal computing devices converge,” Caulfield reports. “Apple relies on Intel processors for its notebook and desktop computers, and ARM-based designs for its booming smartphone and tablet products — leading some to fret that Apple could one day switch to ARM-based chips for the Mac. ‘Our job is to insure our silicon is so compelling, in terms off running the Mac better or being a better iPad device, that as they make those decisions they can’t ignore us,’ Intel Chief Executive Paul Otellini said.”

Caulfield reports, “Intel’s formula for addressing its challenge in the smartphone processor business is the same one the Santa Clara, Calif.-based processor manufacturer has used to dominate everything from server rooms to personal computers: use its size to support manufacturing capabilities its rivals can’t match.”

Read more in the full article here.

MacDailyNews Take: Sounds great, big boy. Oh, one thing: You’re not as big as you think.

Because of their awful mobile processor efforts to date, Intel’s rival is now Apple (A4, A5, A5X, A6) and the rapidly-growing Apple already has double the revenue of Intel, double the profits, is four times the size of Intel (market value), and has of seven times the amount of cash on hand as Intel or basically enough to buy Intel outright.

In effect, Ottelini’s “plan” to overpower “rivals” that include Apple is as flawed as a Pentium processor. His best bet, at least initially, would be to woo Apple’s business by offering to fab Apple’s ARM-based “A” processors. After all, Apple would probably like to put a bit of distance between themselves and their slavish copier Samsung, wouldn’t you think?

That said, if Intel actually can someday produce an innovative mobile processor that bests Apple’s ARM-based “A” designs, Apple should be ready and willing to switch. One should assume, based on history, that Apple has multiple versions of iOS (and OS X) ready-to-go at all times that run on various chip architectures.

35 Comments

    1. What Intel is doing is holding off Apple from switching it’s computers from Intel to ARM. Nothing more.

      Intel makes general purpose CPUs for everything and everybody.

      Apple designs CPUs specificaly for it’s own mobile devices.

      1. Nothing Intel says in public would have this effect, any public blustering if anything is likely to backfire, and work against them. If anything Apple is already working on moving to ARM but it might be a few years for ARM to be ready.

        Frankly I think it is inevitable for the entire computing industry to move to ARM eventually for no other reason than cost. Intel can make more powerful chips but it won’t matter when ARM becomes “good enough.” Then Intel will be in real trouble, especially with Windows already moving onto ARM. Intel can be ahead of ARM on power forever, but when ARM is good enough and far far cheaper, Intel will be in serious jeopardy. That might be awhile, tho, and maybe Intel will come up with something between now and then that saves them long term. Who can say for sure.

  1. There are only theoretical chances that Apple would ever use Intel’s chips in their mobile devices.

    Apple would be only interested if Intel would offer their facilities as contracted manufacturer — such as Samsung currently does.

    But Intel does not want to do this, they want their better 22 nm facilities only for their own designs, because those would offer much better gross margins (by the way, Intel is used to gross margins close to 60-70%, comparing Apple’s 35-45%) comparing to narrow margins for manufacture-only contracts.

    So there is no sense for collaboration now. Neither for Apple, nor for Intel.

  2. IMHO Intel is way too late for Apple’s phone/tablet market. And it may be too late for the Mac’s as well. Intel needs to quit talking about what they are going to do in the future and start producing what they have predicted would happen for some time now.

    1. Yes, and even then it may be too little too late. I am certain Apple already has plans in place and a specific road map to move its entire computer line to its own chips including Macs. I would not be surprised if they even have plans to create their own Fab or control their own Fab, and produce their own chips.

      For example they may purchase or lease much of the required equipment and have someone like Foxcon do the actual fabrications.

    2. Moreover, he is shooting at the current version of Apple’s A chip. By the time Intel has some kind of answer for the A6, Apple will be running A8 or A10. The puck is moving faster than Intel can skate.

    1. AMD was forced into licensing Intel technology with a clause that it is not transferable in the event they are sold to another company. In other words, whoever acquires AMD, would have a severely crippled company and tech.

  3. There they go again. Old guard companies that checked out and sat on their laurels for years now threatening, “to do something right in the future and boy, you better look out!”.
    This is a page right out microsoft’s playbook.
    Somebody needs to tell these braggarts that talk is cheap and is a key characteristic of a company that can’t produce and can’t change.
    The financial markets will quickly get the picture as Intel falls further and further behind, all the while claiming they’re really going to do something important, real soon now.
    Intel needs to just DO IT and STFU.

    1. I would agree with you that Intel, as a business, does very well and has over a long period of time. However, I have become harsher in my opinion of Intel as it relates to the mobile market over the years. It really started in 2007 when the iPhone was introduced. At that time, Intel stated something to the effect that Appple would have been better off if Apple had chosen an Intel processor instead of the one designed by Arm. Intel later had to backtrack on their statements. This harsher attitude has been building due to Intel’s continued boasts regarding their mobile ambitions, that basically say “Wait until next year”. The good news is that I am delighted to wait until next year as by this time next year Intel will have delivered on its promises or it will be painfully and publicly evident that they did not succeed.

  4. … Apple compares to Intel? Bogus. Oh, this AAPL holder knows the facts! The question is “how do they compare?”. While Apple has double the revenue and profits of Intel, how does that split between the A-line and the Mac, the Stores, the software and the iOS lines (outside of the CPU)? Maybe the A-line is heftier than the ARM portion of Intel, but the non-ARM Intel can be brought to bear fairly easily. The Mac, the OSX, the iOS, the App Store(etc), the non-A-line iPad/iPhone/iPod segments would not help much if shifted over to A-line design.
    Not that they are needed. Just commenting on the analysis, here.

  5. Too bad Intel didn’t think of that idea before Apple (and Samsung, Moto, Sony, HTC, Amazon, etc.) started building mobile devices which Intel can’t ignore.

    Intel could have been selling the chips to all these companies (even if they lose money) if they hadn’t sat on their mobile butts for a decade thinking that the future would always be Wintel forever!

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