And a few years prior to that Intel made the most competitive ARM chips (StrongARM). Chances are that an Intel chip would have powered the iPhone had they not scrapped their ARM division due to “reasons”
DEC had started developing ARM chips as they concluded it was a bad idea to try and scale down their alpha chips to be more energy efficient.
Then, after the success of these ARM chips in the blackberry and most of the palm PDAs as well as MP3 players and HTC smartphones, Intel sells it off, so it could focus on trying to make its big chips more energy efficient, making the mistake DEC avoided.
iPhone was a defining moment, but at the time it was completely obvious that smartphones would be a thing, it's just that people thought that the breakthrough product would come from Nokia or Sony-Ericsson (who were using ARM SoCs from TI and Quallcomm respectively). Selling off the ARM division would not have been my priority?
So it's a string of unforced errors. Nevertheless, Intel remains an ARM licensee, they didn't give that up when selling StrongARM, so it seems some people still saw the future..
Sounds like the classic Innovators Dilemma. There wasn't a lot of margin in the ARM chips so Intel doubled down on their high margin server and desktop chips. ARM took over the low end in portable devices and is now challenging in the datacenter.
Baum: Apple owned a big chunk of it, but when Apple was really having hard times, they sold off their chunk at quite a profit, but they sold off the chunk. And then-- oh, while Newton was going on, some people from DEC came to visit, and they said, “Hey, we were looking at doing a low power Alpha and decided that just couldn’t be done, and then looked at the ARM. We think we can make an ARM which is really low power, really high performance, really tiny, and cheap, and we can do it in a year. Would you use that in your Newton?” Cause, you know, we were using ARMs in the Newton, and we all kind of went, “Phhht, yeah. You can’t do it, but, yeah, if you could we’d use it.”
That was the basis of StrongARM, which became a very successful business for DEC. And then DEC sued Intel. Well, I worked on the StrongARM 1500, which was a very interesting product. It was an ARM and a DSP kind of highly combined. It was supposed to be like video processing using set top boxes, and things like that. And then we finished that project and our group in Palo Alto, we were just gonna start an Alpha project.
And just then it was announced that DEC was-- no. No. Intel, at that time, Intel, DEC sued Intel for patent violations, didn’t go to them and say, “Hey, pay up or stop using it.” They just sued them. Intel was completely taken by surprise. There was a settlement. The settlement was you have to buy our Microelectronics Division and pay us a whole pile of money, and everything will go away.
So they sold the Microelectronics Division, which we were part of, except for the Alpha Design Group, 'cause they didn’t think that they could sell that to Intel and have the SEC approve, 'cause the two can conflict. So I went away on vacation not knowing whether I would be coming back and working for Intel, or coming back working for DEC. And it turned out they decided to keep the Alpha Design Group, so I was still working for DEC. Except the reason for the lawsuit was Compaq wanted to buy DEC, but didn’t want to buy ‘em with this Fab and Microelectronics Division. So by doing this, they got rid of the Microelectronics Division, and now they could sell themselves to Compaq.
And a few years prior to that Intel made the most competitive ARM chips (StrongARM). Chances are that an Intel chip would have powered the iPhone had they not scrapped their ARM division due to “reasons”