Transmeta to Intel/AMD: Eat Our Dust

September 26, 2000 - In a recent interview, Transmeta Corporation CEO David Ditzel boldly stated that his company's technology is at least five years ahead of that of Intel and AMD, the two leading CPU vendors in the PC marketplace. Transmeta's "Crusoe" CPU was announced in January. Among Crusoe's notable features is its claim of super-low power consumption, resulting in much longer battery life for notebooks and other similar battery-powered computing devices. Current notebooks usually run out of power after 3-4 hours; Transmeta claims Crusoe-based notebooks can run up to eight hours without recharging. This extended life will (theoretically) allow cross-country fliers to work (or play Quake) for the entire flight.

Market Impact

Although we understand Mr. Ditzel's reasoning, we think he is being a little too optimistic, relative to the actual lead Transmeta has on everyone else. Intel has already shipped CPUs with SpeedStep power management, and AMD's PowerNOW! technology is being used in Compaq notebooks. Crusoe's published specs indicate it still has a battery-life advantage over both of those technologies, although audited comparison tests are sparse. While we tentatively agree that it may take a new chip design for the big guys (AMD/Intel) to emulate Transmeta's architectural philosophy (off-loading hardware functionality onto software), we think the development time would be closer to three years (maybe less), not five years. In the computer biz, five years is approximately equal to "forever".

On the plus side for Transmeta: we do not see them repeating the mistakes made when the Alpha chip was first produced. Digital Equipment, which had hoped to make Alpha a serious challenger to the Intel architecture, neglected to get enough strategic alliances lined up early enough, resulting in a processor with tons of power, but few applications and fewer resellers. Transmeta has already lined up Sony, Fujitsu, Hitachi, and IBM as partners, and we expect them to line up more in the coming months. There are other interesting technological features in Crusoe, but it's rare that technology alone causes a sea-change in a market like this (viz. Alpha).

A longer-term problem for Transmeta will be the choice of markets: they're presently targeting the notebook segment, but we're not sure where they'll go beyond that. Ditzel is (presently) content to stay out of the server and desktop market, and focus on the notebook and mobile devices. We think Crusoe will have greater success in the notebook market - mobile devices (Palm, Pocket PC, and the like) have a number of processors already available, and it's unclear that the extra battery life is a big selling feature for the smaller devices.

User Recommendations

Until Transmeta's claims can be verified on a production-grade notebook, potential corporate customers should watch, but not buy.

If Crusoe-based notebooks demonstrate battery life on a par with their claims, then these notebooks have the potential to be a highly valuable tool for "road warriors" - employees usually on the road, such as salesmen.

Customers intending to buy a notebook as a "desktop replacement" will get only modest benefit from the low-power aspects of Crusoe: battery life is relatively unimportant in those situations.

Non-notebook mobile device users: you'll just have to see what becomes available. For now, Palm-based devices, Pocket PC devices, and Internet-ready cell phones are just fine.


SOURCE:
http://www.technologyevaluation.com/research/articles/transmeta-to-intel-amd-eat-our-dust-16147/