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Interesting exit interview with Intel CEO Paul Otellini wherein he says (duh) he regrets not trying harder not to get his chips inside the iPhone (and subsequently iPod touch and iPads).

But, oh, what could have been! Even Otellini betrayed a profound sense of disappointment over a decision he made about a then-unreleased product that became the iPhone. Shortly after winning Apple’s Mac business, he decided against doing what it took to be the chip in Apple’s paradigm-shifting product.

“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.”

While there seems to be some sentiment that if Otellini had tried, Intel would have won Apple’s iOS device business. But, it clearly isn’t that simple. ARM chips use an order of magnitude less power than Intel chips, even to this day.

Also, if Intel is so great at powering mobile device chips, why wouldn’t Android devices (And Windows 8 devices!) have used them as an advantage?

Steve Jobs and Apple prioritized efficiency over raw power which may have proved to be one of the winning advantages of the feature-rich iPhone and iPad over a decade plus of Windows machines.