Major notebook players jump on Transmeta bandwagon

At least two other companies will use Crusoe chips in notebooks and Web pads, he added, speaking at the PC Expo trade show. So far, Gateway and AOL have said they will use a Crusoe in its upcoming Web pad.

More Crusoe processors are also on the way. The company currently manufacturers a chip named the 5400 for notebooks and the 3200 for devices. The upcoming 5600 will provide higher performance for notebooks, along with new 3300 and 3400 chips for devices.

The apparent embrace of the company's processors sets up a near-instant rivalry with chip giant Intel. With the notebook deals, Transmeta hopes to challenge Intel in the business-computing market. In addition, both companies are working hard to get into the device market and are working feverishly with the Linux community.

"IBM is certainly a top-tier player, and that is pretty impressive," said Linley Gwennap, principal at The Linley Group. "Some of the other guys are along the lines of what you would expect for a new player. The fact that four pretty large companies are showing prototypes indicates a lot of momentum."

The battle over which chip is superior will likely be a heated and never-ending topic. Transmeta chips appear to be more power-efficient, allowing devices to run longer on a single battery charge.

On the other hand, the Crusoe processors do not read Windows applications directly. Instead, the chips apply a process called "code morphing," which even Transmeta admits slows performance a bit. A 600-MHz chip, for instance, may in reality run more like a 500 MHz.

Chip competition

IBM's Transmeta-based machine on display at PC Expo has a battery life of seven hours performing average office tasks. IBM hopes further tuning will extend that to eight hours, said David Nichols, a segment marketing manager at IBM.

IBM said it chose the 5600 Crusoe chip for its low power consumption and consequent long battery life, Nichols added. A different division of IBM also manufactures the chip.

By comparison, the current battery record held by a laptop based on a competing Intel chip is 5.5 hours, said Frank Spindler, general manager of Intel's mobile platform group. That machine, a Sony laptop, uses Intel technology that throttles back the CPU during idle moments.

Spindler argued that much of a computer's battery performance comes from the hard disk, display, memory and other parts of the processor.

"There is no way another device is going to deliver something dramatically up from that," he said, referring to the 5.5-hour battery life of the Sony machine.

Transmeta, not surprisingly, disagreed. In the case of the IBM machine, the CPU consumes between 1 watt and 5 watts, depending on how hard it's working, whereas the rest of the system consumes 5 watts to 6 watts. Part of that advantage is because the chip that controls memory, which is separate in an Intel PC, is part of the Crusoe processor, Fleischman said.

Performance will also improve with the expanded product line. The new 5600 chip is at the top of Transmeta's product line. It will be built at an IBM factory on a 0.18-micron process and run at speeds of 500 MHz to 700 MHz, Ditzel said.

The 5600 has onboard high-speed primary cache memory of 128K and a secondary cache of 256K, Ditzel said. The lower-end 5400 is similar but has only 256K of secondary cache.

Despite having more cache, the 5600 consumes 5 percent to 15 percent less power than the lower-end 5400, said Ed McKernan, Transmeta's director of marketing.

The 3200 chip for Internet appliances uses a 0.22-micron process, has a 96K cache, and will run at 400 MHz, McKernan said.

The 3300 uses the 0.18-micron process, has 128K of primary cache, and runs at 400 MHz, McKernan added. The 3400 is built on a 0.18-micron process, has 128K of primary cache and 258K secondary cache, and will run at speeds of 400 MHz to 500 MHz.

The IBM Thinkpad with the 5600 chip running at 600 MHz works around the same performance level as an Intel chip running at 500 MHz, Nichols said. The IBM machine is expected to cost about the same as a comparable ultrathin laptop with Intel components, he added--between $2,000 and $2,400.

Top-end Crusoe chips will cost in the $200 range, McKernan said, compared with $175 to $600 for Intel's mobile chips.

All of the leading makers are probably evaluating the chip, Gwennap said, adding that just because a PC maker is invested in Transmeta doesn't guarantee they will use the chip in Windows-based notebooks. Ultimately, the appliance market is the bigger opportunity for Transmeta.

"It's probably long term where they're going to be strongest," Gwennap said. "Clearly, they see some opportunities to make money in the PC market, and they're trying to exploit that."

While Transmeta has been relatively silent about which companies might join it next, recent investments from Gateway, Compaq Computer, Quanta, First International Computer and others give a strong indication that these companies will adopt the chip in some fashion.

The opportunity to invest in the company, which has yet to go public, was made at the request of the investors, Transmeta executives have said. Quanta and First International, although probably unfamiliar to U.S. consumers, design and make a number of notebooks and PCs for U.S. companies.

Quanta, for instance, makes notebooks for IBM, Dell Computer, Apple, Hewlett-Packard and Gateway, according to Market Intelligence Center, a research firm in Taiwan. Quanta is also the manufacturer of the Gateway-AOL Web pad, several sources have said.

News.com's Ian Fried and Michael Kanellos contributed to this report.