Intel 'corrects' executives who slammed iPhone

Updated 4:30pm with additional background on the ongoing saga of Apple and Intel.

Intel issued a "correction" Thursday regarding comments one of its executives made earlier this week slamming the iPhone as incapable of working correctly with the Internet.

It's hard to see this as anything other than an formal apology to Apple and ARM for comments made by Intel's Shane Wall and Pankaj Kedia at the company's Intel Developer Forum in Taipei, as reported by our sister site ZDNet Australia. Among other things, the executives resurrected Intel's lame "ARM chips can't handle the Internet" argument and singled out the iPhone as an example of a smartphone that could be really awesome if it only used one of Intel's low-power x86 architecture processors, known as Atom.

But in a posting to Intel's Chip Shots blog Thursday afternoon, Anand Chandrasekher, the head of Intel's low-power efforts, threw his fellow executives under the bus in admitting that Intel's current low-power x86 processors don't even come close to matching the power consumption numbers--a vital design parameter in smartphones--of those made by ARM's partners, which are used in smartphones like the iPhone and over 90 percent of all the mobile phones in the world. The post follows in its entirety.

Anand Chandrasekher issued a correction on comments made by members of his team yesterday at Intel's Developer Forum in Taiwan. As general manager of the Group responsible for Intel's ultra-mobility products, he acknowledged that Intel's low-power Atom processor does not yet match the battery life characteristics of the ARM processor in a phone form factor; and, that while Intel does have plans on the books to get us to be competitive in the ultra low power domain - we are not there as yet. Secondly, Apple's iPhone offering is an extremely innovative product that enables new and exciting market opportunities. The statements made in Taiwan were inappropriate, and Intel representatives should not have been commenting on specific customer designs.

Whoops.

Apple has made it pretty clear that it doesn't buy Intel's argument that since the PC-based Internet experience runs on x86-architecture processors, the best way to bring that experience to the mobile world is to adopt x86 processors. Apple purchased the engineers of P.A. Semi earlier this year to start working on processors based on ARM's cores for future iPhones and iPod Touches, rather than waiting for Intel's Moorestown product--the chip Chandrasekher was referring to in his post--to arrive.

Intel has been making this argument for over a year, but it had avoided slamming high-profile ARM-based smartphones such as the iPhone during extremely public events like IDF. And now we know why; a certain Apple executive said to be close friends with a certain Intel executive was unlikely to be pleased by Intel's comments just as Apple was reporting blowout iPhone sales.

The apology raises the question of just how strained the relationship between the world's largest chip maker and Apple, who have now been partners for a little over three years, has become this year.

For the most part, the relationship has been mutually beneficial. Apple got the notebook processors it desperately needed to upgrade the iMac and the MacBook, as well as a totally committed chip partner, and the results have been stellar. For its part, Intel hooked up with a partner that wasn't totally dependent on the chip company for innovation and that had dramatically more sex appeal than Hewlett-Packard, Dell, or Acer.

Ever since June 2005, Intel executives have been positively giddy about their relationship with Apple, p jointly developed by the style wizards in Cupertino and the engineering wizards in Santa Clara and Oregon. The two companies were said to have engineering staffs that bonded over a common love for innovation, and Intel salespeople were ecstatic at showing off how their technology could be used in leading-edge designs.

But Apple doesn't toe Intel's line the way the rest of the PC industry does. It doesn't need Intel's marketing war chest, it doesn't need its cadre of design engineers, and it doesn't need Intel's brightly colored stickers to help sell its products, as CEO Steve Jobs reminded the poor reporter who dared ask last year why Apple doesn't participate in the Intel Inside program.

Apple has shown that it is quite willing to follow its own path. The purchase of P.A. Semi was a clear signal that Apple had taken a look at Intel's future road map for low-power processors, and decided it had to take matters into its own hands regarding future chips for the iPhone and iPod Touch. And while Apple is unlikely to dump Intel's processors anytime soon from the Mac lineup--especially given the struggles of Advanced Micro Devices this year--its decision to use Nvidia's integrated graphics chipsets in the newest editions of the MacBook underscores what everyone in the PC industry knew anyway: Intel's integrated graphics chipsets are the bottom of the barrel.

Meanwhile, the Intel-based gadgets co-designed by Apple and the chipmaker are nowhere to be found. Intel had probably hoped that it could sell Apple on the Netbook or Mobile Internet Device concepts that it has been flogging for the past two years, but Apple has sensibly concentrated its efforts on the iPhone and Mac rather than helping Intel get its ideas for mobile computing off the ground.

So where does that leave the two companies? They'll be fine, although Intel is sleeping on the couch tonight. This week's exercise, however, is an interesting example of how much power Apple wields over one of the most important and historic companies in technology.

Intel has never apologized for slamming IBM's Power server chip--a competitor to its Itanium processor--while simultaneously selling IBM Xeon chips for a different class of servers. But one offhand remark surfaces about Jobs' iPhone, and Intel bends over backward to smooth things over.