You say that as if Intel should have known that the iPhone would be an explosive hit. They probably assumed it would be yet another Blackberry competitor, not really a threat to their desktop hegemony.
I honestly think people overlook this aspect of Jobs leadership, basically from the time he returned on Apple he doubled down on mobile computing repeatedly throwing 50% of Apple's marketing budget into the unproven iPod for instance. Why was Jobs able to see the writing on the wall and not Intel? I think Steve Jobs himself said it best:
https://www.youtube.com/watch?v=P4VBqTViEx4
Intel itself was NOT totally blindsided by the mobile revolution. Intel Atom development started in 2004. Intel Atom could have dominated the market. There were Intel Execs pushing Atom. But all the R&D was pumped into the desktop and server business, the quality silicon was reserved for the desktop and server business, Intels execs didn't want these inexpensive chips for what were presumed to be peoples secondary computers to cannibalise its expensive desktop and server chips, and the strategic vision was simply bad. You can apologise for it but the mistake may have doomed the entire business and plenty of companies did not make the same mistake.
Intel wouldn't even exist if they didn't already make such a shift away from the memory market into the microprocessor market firing most of the their company in the process. Intel had leaders with strategic vision and guts back in the day, and the senior leadership simply weren't good enough to commit to mobile when that bridge had to be crossed.
Depends on what you call Atom, but if you mean Atom as it was released then absolutely no, it had exactly zero fighting chance. IIRC first Atoms were Pentium 4 or so fabricated on smaller process and resulting in lower power draw. The only meaningful use for early Atoms was crappy netbooks.
However, it was or could have been an important stepping stone for paving the road towards x86-based low power devices. Remember, it was also a time where linux-on-arm started booming. It could have been an alternative to ARM SoCs, but there were simply too little attractive offerings and Broadcom/Freescale/Ti effectively ate the market
Everyone has rose tinted glasses and short memories when it comes to just how far computers have come in the last 15 years. For reference, netbooks predate iPads by 3 years. They came out about the same time as the first iPhone.
The low power long life computing platform has for the longest time been a dream. Netbooks with 4-8 hour battery existed at the same time that a top of the line laptop would get only 3 hours battery life, a normal consumer grade laptop would top out at 1-2 hours, for a 1/4 of the price.
If you squint hard enough, there is no discernible difference between the aspiration of the netbook platform, and a modern chrome book or iPad with a keyboard, but Intel doesn’t make processors for either platform.
Completely agree here, I call Atom important stepping stone. However, as you mentioned Intel does not make processors for descendant platforms.
As I have elaborated in different comment, I guess the major reason Atom failed was market positioning. They were effectively eaten by ARMs getting more powerful from one end and mobile CPUs getting more power efficient from the other end.
So while I agree that Atom based netbooks helped start the whole mobile compute market, my argument is that market positioning of Atom products meant that they were destined to be replaced. IMO success of Atom required a bit more useful PC-like devices AND high integrity SoCs for appliances.
People also overlook the mobile phone market outside US.
The big telcos were handing out data in miserly amounts and eye bleeding prices (think 50 bucks for 1MB then another 30-50 for SMS). AT&T was willing to pair with an unlimited plan set the iPhone wildly ahead of all the other phones in that category. VZ messed up big on that one. They were touting how amazing their network was meanwhile their competition was letting people surf the net from their phone. VZ was meanwhile still charging silly rates for SMS. Meanwhile I could open a connection on an iPhone and use an online chat service or the unlimited SMS. All of the other phones from that time could do similar things. It was the per month charge that people balked at to do simple internet things. Then on top of that it was apple so it had a bit of cool to go with it. I personally think though without that data plan the thing would have been a dud.
From what I recall, the original iPhone only supported 2G, while contemporary phones supported 3G. I remember a lot of criticism around the iPhone web experience because of that, even though the interface was clearly superior to everyone who used it.
It looks like there were relatively competitive data plans available[1] that offered unlimited data. I'm not really convinced that that was the problem.
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1. https://arstechnica.com/gadgets/2007/04/data-plans-the-barri...
Yep. Only EDGE and quad-band GSM ("2G"). The second generation iPhone was called the "iPhone 3G" specifically because it supported tri-band UMTS ("3G") with HSDPA. In fact, some even back-named the first generation iPhone to "iPhone 2G".
Even if the iPhone wasn't an explosive hit and the smartphone growth didn't explode, 10% of Blackberries market would have meant millions of processors sold to Apple in the first years and any other Blackberry competitor that was interested,
But they clearly had high ambitions for their new revolutionary ergonomic mobile "phone" + "music player" + "internet". They wanted to define a new indispensable market and they wanted to own it. They already had a multi-year product path and design pipeline for regular major upgrades in place.
The iPhone was intended to be a "next big thing" from the start.
And it seems unlikely Steve was selling Intel on doing a new chip for 1% of the phone market. He was telling Intel this was the future, in some form.
Apple was an objective market demonstration, with no ambiguity, that there was now a need for low-power first (as apposed to speed first) that would got to other suppliers if Intel didn't move.
This was a leadership failure at Intel. They happen.
Some people thought that, yeah. But not everybody, and not on the same places Intel sold their chips to.
Anyway, Intel sold their foundry exactly because its unitary profit was way too small for them. Since then, the company only got more expensive, so they wouldn't be able to keep it.