HP draws on Intel for next tablet

The Palo, Alto, Calif.-based computer giant is preparing to launch the HP Compaq Tablet TC1100 this fall, based on Intel mobile processors, sources close to the company said.

The forthcoming tablet, which will appear soon, looks much like the company's current model. They both have a 10.4-inch screen, for example, and probably will weigh about the same. But the new one will have a different processor, the sources said.

It will offer a choice of an 800MHz Celeron or a 1GHz Pentium M chip from Intel, the sources said. HP's current tablet, the HP Compaq Tablet PC TC1000, comes with a 1GHz Transmeta TM 5800 chip.

The change is likely a result of an effort to gain more performance and also to help lure business customers. To date, tablets like HP's, which come with Microsoft's Windows XP Tablet PC Edition operating system, have sold relatively well. But they have most often been adopted by businesses in specialized industries such as healthcare, analysts say.

Worldwide tablet sales reached nearly 72,000 units in the fourth quarter of 2002, following the November launch of the Microsoft tablet OS and tablet PCs from HP, Acer, Toshiba and others. Tablet PC shipments are expected to grow to 500,000 in 2004, IDC has said.

"Tablet PC shipments have met my expectations," said Alan Promisel, an analyst with IDC. But "it's primarily a vertical market. There's still a lack of one application that appeals to all users."

The advent of larger screens on so-called convertible tablets--notebooks whose screens open and rotate and fold down to create a tablet--and the adoption of higher-performance processors are expected to help boost sales.

Transmeta will most likely gain some tablet PC business following the launch of its next processor, the Efficeon, on Oct. 14. But HP may deal the company a blow by not using that chip in its latest tablet.

The Pentium M, which is often bundled into a package named Centrino with an Intel chipset and a wireless module, is becoming more popular for tablets. So far, manufacturers such as Acer and Motion Computing have moved to the Pentium M, which they say offers more performance than the Pentium III-M chip they previously used.

Still, Transmeta is expected to name a handful of PC makers that are either evaluating or using Efficeon in products. They are likely to include Sharp, which sells a line of notebooks in the United States, and start-up Antelope Technologies, which is building a modular computer. Antelope's Modular Computer Core, based on a Transmeta chip, is designed to plug into a desktop or handheld chassis, allowing it to operate in different environments.

Transmeta declined to comment on future products.

HP is expected to maintain its relationship with the chipmaker, however, by continuing to offer the TC1000 tablet for a time. It is also likely to make clear that it has reserved the right to move back to a Transmeta processor in the future, should it find that Efficeon or another chip meets its needs.

HP also uses Transmeta processors in two of its newly introduced thin clients, which are terminal-like computers that are designed for businesses.

HP, which declined to comment on its future plans, won't be the only company with a new tablet this fall. Fujitsu recently released a convertible tablet. The next few months should see upgraded models from others, including Acer and Toshiba.