Transmeta Puts Its Chips on Mobility

Confident "the world is going wireless," the chip maker sees a growing demand for Crusoe.

NEW YORK—For Transmeta Corp., its always been about timing.

The Santa Clara, Calif., company, which makes small, inexpensive chips for mobile computing devices and high-density servers, has been hammered over the past several quarters after the months-long delay of the release of its Crusoe TM5800 chip. Scheduled to come out in the summer of 2001, it wasnt released until earlier this year.

The problems contributed to poor quarterly earnings and the ouster of the companys CEO last fall.

But officials are confident now that timing will be on their side.

With the momentum of Hewlett-Packard Co.s decision earlier this month to use the companys 1GHz Crusoe TM5800 chip in its forthcoming Compaq Evo Tablet PC, Transmeta officials say that as demand grows for greater mobility, demand also will grow for its chips.

"What they care about is heat and battery life," David Ditzel, Transmetas chief technology officer, said Tuesday. "We believe the world is going wireless, and thats why Crusoe matters."

The company has chips in many ultralight notebooks, mostly in Japan, although on Tuesday it announced a deal with Gericom, a European notebook maker. But what Transmeta is waiting on is Microsoft Corp.s release of its Windows XP Tablet PC Edition this fall. Having Windows XP in a tablet PC will generate interest in the technology—the devices are PCs on which users cans write directly on the screen with a stylus—said Transmeta President and CEO Matthew Perry.

HP, of Palo Alto, Calif., will release the Evo tablet PC around the same time, which also will mark Transmetas release of its 1GHz chip. Currently the fastest TM5800 is 876MHz.

Perry said Transmeta also is talking with other computer makers about using Crusoe chips, although he declined to say who those companies are.

IBM had planned to use Transmeta chips in some of its notebooks, but pulled those plans back in October 2000. RLX Technologies Inc., a pioneer in the blade server technology, initially used only Transmeta chips, but officials said earlier this year they were going to introduce Intel-based products as well.

But Perry and Ditzel said that Transmeta chips are still less expensive, consume less power and generate less heat than chips from rivals Intel Corp. and Advanced Micro Devices Inc.

At a function room at Rockefeller Center, several blocks away from the TechXNY show, the company set up dozens of products using Transmeta chips, including Sony Corp. Vaio U series ultralight notebooks, popular devices in Japan that are just coming into the U.S. market, Perry said.

Also on display were prototypes of the much-touted computers from San Francisco-based OQO Inc. The computer, which at 250 grams can fit in the palm of a hand, can run Windows XP and also can be hooked up to a mouse, keyboard and monitor to be used as a desktop.

OQO Colin Hunter said the device, which he expects will be generally available in the first quarter of 2003, could only run on a Crusoe chip. Other processors would generate too much heat to be put into such a small device.

Hunter said the device incorporates a desktop, laptop and PDA environment. And while PDAs have made inroads with consumers, enterprises will embrace the smaller computer, which has more functionality, better display and fewer problems integration with a businesss computer system, he said.