Intel aims at Transmeta with new notebook chips

A cavalcade of notebooks will hit shelves and e-commerce sites soon, as Intel on Monday will come out with five new notebook processors, including two low-power chips designed to compete against Transmeta's Crusoe.

The Santa Clara, Calif.-based company will release a 750-MHz Pentium III and two Celerons running at 650-MHz and 600-MHz for the mainstream notebook market, said sources close to the company.

In addition, two lower-power processors for the ultraportable market will emerge: a 600-MHz Pentium III that consumes an average of less than a watt of power, as well as a 500-MHz Celeron that consumes less than two watts. Nearly all major manufacturers say they will incorporate some, or all, of these chips into notebooks in the coming weeks.

Desktops also will be in the news next week, as Intel on the same day will come out with its 815 chipset, which will allow PC makers to marry the latest Pentium III technology without adopting expensive Rambus memory.

All this silicon comes at a critical time for Intel. Pentium IIIs and many Celerons have been in short supply since October because of a factory capacity shortage, higher-than-expected demand and, according to some, sporadic manufacturing difficulties. The shortage has stunted sales. Rival Advanced Micro Devices, meanwhile, has been grabbing more market share in the performance desktop sector.

"Intel's supply capabilities scared a lot of customers," Simon Lin, CEO of Acer Information Products Group, said in an interview earlier this week. "Perhaps these alternatives will have a better chance."

Notebook chips have remained one of Intel's more profitable segments, but the company will soon see the emergence of a new competitor in Transmeta.

Chip competition

Transmeta, which has developed a low-powered chip for notebooks, plans to show off at PC Expo later this month a number of notebooks for the business market from major manufacturers using its 5400 Crusoe processor.

"We're going to show a lot of great notebooks at PC Expo," said Jim Chapman, Transmeta senior vice president of sales and marketing.

The company's coming out party is significant in that no company to date has seriously competed against Intel in the business market. IBM has already said it will show off a Transmeta-based notebook. Compaq Computer and Gateway also are likely to be there, as both invested in Transmeta earlier this year.

"Intel is getting within striking distance, and that may be all they need," said Kevin Krewell, an analyst with MicroDesign Resources. "If I am an MIS guy, and I have a choice between Transmeta...and Intel, the corporate guy will probably go for Intel."