I remember very vividly the number of irate customers that wanted to return their machine and or sue INTEL. The CEO at the time stated that there was nothing wrong with their CPU's for the average user, and as such they would not be replacing them. Within 1 week of his idiotic statement, our phones were ringing off the hook.
Not long after, INTEL decided that they would in fact replace said CPU's, talk in the industry was that INTEL was getting an earful from their distributors and customers. Having said that, what do you think would have happened if he stuck by his original statement?
And...
At no point were they “at the brink of going belly up”...
Did you know that the first IBM PC, the PC-1 had a ROM bug that caused IBM’s supplied Basic to give a seriously wrong result by doing a specific combination of addition followed by a divide?
That was fun...
Well, let’s both agree that Intel had a PR nightmare on their hands. We can disagree about Intel being on any sort of financial brink when they finally caved, though that may well have come as their OEMs were starting to riot. And Intel caved because the CEO’s original statement (that the average user would see a math error only every gazillion years) was quickly proven untrue. I remember typing in a simple formula into Excel which resulted in a bogus answer. That sort of thing spread like wildfire, exposing the CEO as either a liar or clueless or both, and Intel was cornered. The result was a $500 million charge against earnings to pay for the recall. That surely pinched, but let’s face it, that’s a small fraction of what Intel earned even then.
One consequence of this affair was one of the most annoying advertising blitzes ever, shortly after the dust settled. Remember the jitterbugging cleanroom guys, dancing around in bunny suits? The horror!