NewsFactor Network | Whatever Happened to Transmeta?

Whatever Happened to Transmeta?
By Tiernan Ray

March 5, 2003 4:00AM

Digg It!

No longer a stealth threat to Intel's health, Transmeta hopes its new chip will bolster its argument that smarter, not faster, is better.

A company could not hope for a better coming-out party. Excitement was palpable just before Transmeta's (Nasdaq: TMTA) debut in 2000. The enigmatic Santa Clara, California-based chipmaker had lured Linus Torvalds, developer of the Linux kernel, and Torvalds was mum on his work inside the startup, amplifying speculation. When it was revealed that Transmeta would compete head-on with Intel

in the notebook

PC market, the prospect made some giddy with anticipation.

But after a high-flying IPO in November 2000 -- Transmeta stock soared 139 percent on its first day, closing at about US$45 per share -- came two years of pain. The company missed product shipments, underwhelmed with its parts and seemed only to re-energize Intel.

Now, with a new product in the works and a broadening of its overall product line, Transmeta is trying to revive its hopes. Though it may never dominate the mobile computing market, the company may yet make its case that a small chip company, by designing smarter products, can carve out a business that is not tied to the Pentium's relentless march to be faster.

Aiming High with Low Power

Transmeta started life eight years ago, basing its business model on the premise that Intel's Pentium chips, which had been drafted into service for laptops, would not meet the long battery life and thermal requirements of the notebook market, which was becoming a larger slice of the overall computer market. (Today, laptops represent more than 20 percent of all new PCs sold, according to combined Gartner/IDC vendor surveys.)

To compete against Intel's ever-faster chips, Transmeta set out to achieve the greatest processing power for the fewest watts of electricity consumed, hoping to shift PC vendors" attention to systems that would not require noisy fans and that would run for many more hours on battery power. The company won several design awards for its initial Crusoe processors, but user reviews were mixed. As reported on NewsFactor in "Who Needs Tablet PCs?" critics of Tablet PCs containing even the latest Crusoe chips have noted less-than-ideal performance in some of the devices, such as the Compaq T1000.

Observers say Transmeta's first attempts really only delivered on one of the company's two major promises -- longer battery life -- without comparable performance. "There were certain applications, such as DVD playback, where Transmeta shined," said Peter Glaskowsky, a senior analyst with InStat/MDR. "However, for a wide variety of other applications, Transmeta did not offer competitive performance. They failed to prove their arguments in their first chips." (continued...)

1 | 2 | 3 | Next Page >