Transmeta (Semiconductor) (TMTA)

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AMD To Resell Transmeta's Pay-As-You-Go Chip
AMD Exec Hints At Broader Partnership Ahead

By Natali T. Del Conte

Advanced Micro Devices could not design a FlexGo-compatible product in time, so the company has partnered with Transmeta Corporation, a microprocessor manufacturer that could.

An agreement between the two companies, announced late Monday, calls for AMD to market and distribute a version of Transmeta's Efficeon chip, that was designed to support Microsoft's pay-as-you-go-PC technology.

"Transmeta could implement the FlexGo technology into their processor very quickly," said Billy Edwards, AMD chief innovation officer and senior vice president, in an interview. "We've got a great sales and distribution arm and they've got a great timely product so it's a good combination for both corporations."

Once rivals, the agreement transforms the relationship between AMD and Transmeta into partners. Although Transmeta virtually pioneered the push toward inexpensive, low-power computing, the company suffered heavy losses after Intel introduced its own low-power chip, the Pentium M, and today primarily concentrates on licensing its technology.

Under AMD's 50x15 plan, the company has committed to establishing a global network of partners and business models that will aid in connecting 50 percent of the world's population to the Internet by the year 2015. Currently, only 15 percent are connected. AMD believes that Microsoft's FlexGo is one way to do that.

FlexGo, which is in its second trials in Brazil, has two models. The first allows users, after making an initial down payment on a midrange PC, to buy time and make payments on their PC using prepaid cards, similar to those sold by cell phone makers in various countries. Users will pay for the time they use their PCs, much the way individuals do now in Internet cafes. An alert on users' desktops will show them how much computing time they have available before they need to add more credit.

The second model allows users to make initial down payments on midrange PCs and make monthly payments of software and broadband services from their local service providers, much the same way may users pay cable providers for television and software access.

Transmeta's Efficeon will allow OEMs and other partners to have FlexGo implementation that can be adapted to mobile and desktop systems.

"Transmeta developed a customized version of the Efficeon processor with Microsoft so we have the most secure solution," said Transmeta chief executive and president Arthur Swift. "AMD brings a well-known and highly regarded brand to the market so the combination of Transmeta's technology and AMD's branding really meets our goal to bring low cost computing worldwide."

Eventually, AMD says may look to manufacture Efficeon's technology inside their own processors. For the time being, however, the company will focus on bringing Transmeta's device to the masses.

"Over time, we will certainly look at putting those in the appropriate parts of our product line," Edwards said. "With this agreement, you can think of it as competitive but I like to think of it as great for us because it allows us to not just participate but also learn. This is a whole new arena."

http://www.extremetech.com/article2/0,1697,1972256,00.asp