Intel's record in SOC has not been great. Do you really think that if Otellini said "Yes" then Intel would have delivered on function, power, cost and schedule? Surely Apple would have multiple bidders that would have delivered ahead of Intel anyway.
It cannot be assumed that Ottelini's "Yes" would have meant Intel being successful. Even if Intel made it to design win then an "Intel Inside" iPhone might have flopped. It would have been late.
Intel delivers on high performance CPUs in spades. Initially desktops for home and office - morphing into laptops (portable PCs) and servers (grown up PCs on steroids).
All attempts at diversification have been abject failures. Consequence is massive layoff.