There are a few objective reasons making it difficult to compete in the cellular business and a few Intel specific reasons:
- Intel's process and FABs are designed for high performance x86 chips. Not low power cellular chips. Given that the margins on x86 chips are also way higher, there was no incentive to change anything. So the cellular modems were produced using a power hungry process and were less competitive.
- At the time, Qualcomm was holding most essential patents required for implementing 3G (and probably now 4G). Licensing fees are enormous burden on anyone entering the market.
- Cellular technology undergoes tons of tests by operators, handset manufacturers, base station equipment manufacturers. It takes a lot of effort (and manpower) to execute all these tests and make the required modifications. It doesn't help that the reference platform is Qualcommm. So if you had made different a different tradeoff than Qualcomm, you may do better in some tests but will have to make fixes for other tests.
- Some problems are only seen in the field and only in certain places (due to quirky base station equipment, non standard deployment, etc.) Again, it takes a lot of effort to detect and fix those issues.
- Qualcomm (The big incumbent in this business) is huge: over 30,000 employees. No way you can compete if all you have is about a 1000-engineers in your cellular division.
By the way, the only successful cellular maker I'm aware of besides Qualcomm is MediaTek (Taiwan) which:
- Concentrates on the low end market.
- Ships complete solutions. You can find lots of different phones which are essentially a single MTK design with very few modifications.