Apple used a software solution to make sure older PowerPC apps would still work on the Intel machines. Apple decides to rebrand their machines while they're at it, the iBook becomes the MacBook, the PowerBook becomes the MacBook Pro, the Power Mac becomes the Mac Pro, and the iMac becomes the Mac... okay that last one isn't true.
So, Intel and Apple are holding hands and they're in all kinds of love. While all this stuff is happening, Apple is working on a phone of some kind, and get this - Intel had the opportunity to build the processor inside the iPhone. Let that sink in for a second. So, what's the source of this information? Is it a bunch of rumors? Is it conjecture? No, it's Paul O'Neill, former CEO of Intel. He explained the whole thing to The Atlantic.
Dramatic reenactor, Paul, 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. No one knew what the iPhone would do.
Paul, why, why would you do that? 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 where you can make up on volume.
In hindsight, the forecasted cost was wrong and the volume was 100 times more than what anyone thought. Any other words, you want to add to that?
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.
My gut told me to say yes. Well isn't that something? So Apple went ahead with its own chip design for the iPhone and who built that chip for them? Apple's pal Samsung.
Yes, that's true and don't you just love how business works?
So Intel could have powered the iPhone but that didn't happen. But Intel was inside of Mac so that's good. The Apple-Intel partnership seemed to be going swimmingly up until 2015. That's like a nine-year honeymoon.
Let's set the stage for 2015. Barack Obama is the President, net neutrality was protected in the U.S., and the first of many new Star Wars movies is coming up. Enter Skylake, Intel's newest processors, and potentially the beginning of the end of Intel and Apple.
Former Intel Principal Engineer, Francois Pietenol, explained: Take it away dramatic reenactor, Francois. The quality assurance of Skylake was more than a problem; it was abnormally bad. We were getting way too much sight for little things inside Skylake. Basically our buddies at Apple became the number one filler of problems in the architecture.
That went really, really bad when your customer starts finding almost as much bugs as you found yourself. You're not leading in the right place for me.
This is the inflection point. This is where the Apple guys who were always contemplating to switch they went and looked at it and said well we've probably got to do it. Basically, the bad quality assurance at Skylake is responsible for them to actually go away from the platform so yeah that's not great in 2018.
Bloomberg reported that Apple was planning to dump Intel as early as 2020. That's pretty dang accurate. Look, Apple has a history of wanting to control every part of its devices so the reports did not sound crazy at all.
Speaking of controlling every part of its devices, Apple bought Intel's smartphone modem business in 2019 for a billion dollars. So right now, Intel is kind of like that last guest at the Apple party just kind of awkwardly standing there not going home yet but you know don't feel too bad.
Intel's got plenty of other parties to go to. Will Apple ever return to Intel for chips? I'll say probably not if Apple can get the performance it wants out of its computers with its own chips.
Apple will just keep at it. Plus, Apple has a huge app library from iOS and iPad OS that can be tinkered with to fill in any app gaps. I think the real question is will Apple start running ads like this? Where they used to mock Intel, Apple computer would like to apologize for toasting the Pentium 2 processor in public.
But the fact remains the chip inside every new Power Macintosh G3 is up to twice as fast. Maybe could you imagine if Intel powered the iPhone? Let me know what you think about that in the comments.