Intel, Transmeta Cultivate Mobile Market

2GHz Pentium 4-M released; 1GHz Crusoe processor slated for debut in fall.

Processors for mobile and lightweight devices are getting faster, but for Intel Corp. customers, theyre also getting more expensive.

Intel, of Santa Clara, Calif., last week released its fastest mobile Pentium 4 chip. The 2GHz Pentium 4-M has an initial price of $637 per chip (in 1,000-unit shipments), about 80 percent higher than the previous mobile speed champ, a 1.8GHz Pentium 4-M, offered at $348.

In addition, Intel introduced a 1.9GHz Pentium 4-M priced at $401.

Major computer makers, including Dell Computer Corp. and Hewlett-Packard Co., are expected to quickly offer notebooks featuring the new Intel chips; theyll likely be priced at about $2,500, or about $1,000 higher than the current average selling price for laptops.

The success of the chips hinges on computer makers experiencing a rebound in PC sales, a scenario considered unlikely in light of forecasts of weak IT and consumer spending through the next several months. Moreover, some IT managers say they see little need for a 2GHz mobile chip.

"The 1GHz notebooks we got in last year are still doing a great job," said Sam Avera, technology manager for the state of Washingtons Aging and Adult Services department, in Seattle. "I tell our people that we dont need to worry about the CPU until there are big changes in the software, which I dont see happening any time soon."

The launch of the chips came a month after Intel slashed prices by more than 50 percent on its fastest desktop and mobile processors. Despite the dramatic cost cutting, Intel on June 6 said sales were falling below projections and blamed weaker-than-expected demand in Europe for forcing the company to lower its sales forecast for the quarter.

Also last week, Transmeta Corp., which makes chips for mobile devices and high- density servers, announced that it will release a 1GHz version of its Crusoe TM5800 chip this fall, when HP rolls out its Crusoe-based Compaq Evo Tablet PC.

Transmeta, also of Santa Clara, is hoping HPs adoption of the 1GHz Crusoe will give the company momentum as it tries to gain a foothold in the United States.

Transmeta chips are widely used in devices in Japan, and the company last week unveiled a deal with Gericom AG, a European notebook maker based in Linz, Germany. But U.S. businesses have been more comfortable with products based on processors from Intel or Advanced Micro Devices Inc.

However, Transmeta President and CEO Matthew Perry said during an interview in New York last week that as ultralight notebooks and tablet PCs become more ubiquitous, the demand for cooler- running processors will rise.

Transmeta is addressing problems generated when it was several months late in releasing the current version of the TM5800, which has a top speed of 876MHz.

The chip was to be released last summer but did not come out until earlier this year. The companys earnings declined, and its previous CEO lost his job as a result of the delay.