However, deep pockets allow you to buy a company that can compete. I think Intel will do that within the next few years. I am sure they have the inside track to some companies that will get them in the wireless space.
Intel did have the PXA series of processors which were ARM based but their die sizes were too large and uncompetitive. The parts were sold off to Marvelle and now Intel is trying to get back into the mobile market. The mobile market is seeing roughly 15% growth while the traditional PC market is growing something like less than 5%. If you are going into the mobile market everybody wants ARM.
Assuming that you have a solid plan and sufficiently deep pockets (like Intel!), success favours those who keep at it. If you keep jumping in and out, expecting overnight success in a very conservative market, you are unlikely to succeed in anything other than spending your hard earned. This is something that keeps the wind in Intel's sail on the desktop and in the server space, so they should know better. Perhaps they shouldn't have dumped XScale at the first sign of hardship!
For the last 25 years, Intel has never shown it has better IC designs except in process technologies. Remember Intel's 80286 and 386 were not competitive when others offer the same thing? And through out its history, there is no customer service from Intel.
The PC companies benefited from WinTel monopoly in the 80s and first half of 90's, then they realized they were held hostage by WinTel, but it was too late. So, every company with their right mind understood they should avoid using Intel products whenever possible. Therefore, outside its monopolized PC segment (which should include tablet but Intel is insignificant), Intel has not played any role at all. I don't see this is going to change any time soon.
Looks to be quite dumb as to why Intel engineers were attempting such mammoth Integration tasks. Looks to be much enormous R&D dollars wasted.
TI went in the other direction and adopted PoP technology, wherein their baseband chips have pads on top. DRAM chips can be mounted on these pads right on top of the baseband. This gives flexibilty to the handset manufacturer to delay its memory size decision right upto the last assembly stage. In some cases a manual rework step on finished boards. Much like the Apple in China example from Bert above.
Bert22306 makes a good point. All-in-one integration seems like a good thing to do, but clearly does not allow for rapid changes in feature sets for cell phone differentiation and tiered platform strategies. Furthermore, such complicated chips take longer to design, debug, and validate in an actual phone design. If you miss a key timeline in the customers plans, an alternative solution can get in even if it is not optimized to the nth degree. Best to remain flexible.