Even Otellini's natural rival, former AMD CEO Hector Ruiz, had to agree that Intel's CEO "was more successful than people give him credit for."
But, oh, what could have been! Even Otellini betrayed a profound sense of disappointment over a decision he made about a then-unreleased product that became the iPhone. Shortly after winning Apple's Mac business, he decided against doing what it took to be the chip in Apple's paradigm-shifting product.
"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," Otellini told me in a two-hour conversation during his last month at Intel. "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."
It was the only moment I heard regret slip into Otellini's voice during the several hours of conversations I had with him. "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," he said. "My gut told me to say yes."
The argument that the iPhone hadn't launched and "no one knew what it could do" is a poor excuse for Otellini missing one of the most critical inflection points for the evolution of handheld computing devices. Fact is, at the time the Blackberry and other pre-iPhone smartphones were already enormously popular and the global market for mobile devices was growing exponentially. And at the time Intel already knew cellphones were one of the fastest growing markets for the semiconductor industry, but instead of making CPUs suitable for handheld use and taking the business from ARM Otellini pumped billions of dollars into a useless multi-year effort financing the U.S. startup Clearwire and pushing their WiMAX standard - which was ill-fit and doomed from the start with mainstream carriers.
The wasted opportunity is absolutely tragic. Learning this now just makes the "come from behind" situation that much more annoying.
Many of the structural changes that occurred in these industries now seem predictable. It feels like somebody else could have positioned Intel differently to take advantage of these trends. At the very least, Otellini should have seen where the changes were leading the silicon world.
And the thing is, he did. He just wasn't able to get the Intel machine turning fast enough. "The explosion of low-end devices, we kinda saw as a company and for a variety of reasons weren't able to get our arms around it early enough," he admitted.
It was Otellini, after all, who had made the call to start developing the very successful low-power Atom processor for mobile computing applications. And it was Otellini, who upon ascending to the throne, drew a diagram that I'll call the Otellini Corollary to Moore's Law at the company's annual Strategic Long Range Planning Process meeting, or SLRP. He duplicated it for me in an appropriately anonymous Intel conference room, calling it half-jokingly "the history of the computer industry in one chart."
On the Y-axis, we have the number of units sold in a year. On the X-axis, we have the price of the device, beginning with the $10,000 IBM PC at the far left and extending to $100 on the far right. Then, he drew a diagonal line bisecting the axes. As Otellini sketched, he talked through the movements represented in the chart. "By the time the price got to $1000, sort of in the mid-90s, the industry got to 100 million units a year," he said, circling the $1k. "And as PCs continued to come down in price, they got to be an average price of 600 or 700 dollars and we got up to 300 million units." He traced the line up to his diagonal line and drew an arrow pointing to a dot on the line. "You are here," he said. "I don't mean just phones, but mainstream computing is a billlion units at $100. That's where we're headed."
"What I told our guys is that we rode all the way up through here, but what we needed to do was very different to get to [a billion units]... You have to be able to build chips for $10 and sell a lot of them."
"This is what I had to draw to get Intel to start thinking about ultracheap," Otellini concluded.
"How well do you think Intel is thinking about ultracheap?" I asked.
"Oh they got it now," he said, to the laughter of the press relations crew with us. "I did this in '05, so it's [been more than] seven years now. They got it as of about two years ago. Everybody in the company has got it now, but it took a while to move the machine."