"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."
(emphasis added)
And that is pretty much how fortunes are won and lost anytime a disruptive technology or product comes along.
It may yet be Intel's own undoing that they failed to capitalize on such an early opportunity to get in on the ground-floor of the "next big thing".
Smartphones have clearly become the next killer app.
I'm personally appalled at the sight of 3 and 4 yr old kids glued to their smartphones, just playing games and stuff, but the shift is rather stark and apparent.
When this generation of kids grow up to be adults, workers by day and consumers by night, they are so not going to be interested in their grandfather's computer (desktop) or bulky TV-bound gaming console.
If you want to see the future all you have to do is step into a McDonalds and look around, take note of people sitting at the same table and eating right across from one another but are miles apart mentally because they are all glued to their twitter feeds and smartphones.
None of those people have any need for a desktop and when their kids grow up they won't either, even as working professionals.
I liken it to the classic male neck-tie. Once upon a time you wore one even if all you did was pump gas for a nickel an hour. Then it became niche and only the white-collar professional wore them. Now it is even more rare and nearly extinct in the professional world. There are a few circles, specific industries such as finance, where the male neck-tie is required dress. But everyone else just goes to work with Kacki pants and a button-down collared shirt.
I think the same is going to happen to laptops and desktops once this generation of kids grow up, having lived with a smartphone in hand for the first 20yrs of their lives.
Just this past week I had a gentlemen come to my house, maybe in his mid-20's, to do a complete inventory of my households effects (for moving to Asia) and he didn't have a laptop or tablet. He did the entire house inventory, silly fast too, with his smartphone.
I looked at it and he had all the info logged into a spreadsheet. This wasn't a simply "clicking a +1 button to count up the estimated number of boxes". He was documenting and filing accurate and specific information on the fly as we walked through the house.
The guy was clearly adept at inputting info with the touchscreen on his smartphone, to the point where it was definitely second-hand for him.
That may be uncomfortable and disconcerting to us 40 yr-old "grandpas" who can't accept the idea of real work being done without a keyboard and 24" LCD but it really is the future, it came and visited me just this past week
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