Transmeta (Semiconductor) (TMTA)

[UKBird]

Here is the ZDNET UK article in full. Analysts! Penquins regurgitate fresher food than this......walk a mile in their shoes!!!!!!!!Matthew BORESUM. Bird X

Analyst: Transmeta should drop out of PCs
14:20 Thursday 7th March 2002
Matthew Broersma


Delays, weakening manufacturer support and poor performance have effectively marginalised Transmeta in the PC market, but other options are open to it, says IDC
Transmeta should look at moving out of the laptop PCs into a less competitive market, despite finally easing production problems with its 5500 and 5800 processors, according to analyst firm IDC.

The US chip designer said recently that three new laptops from Sony and Fujitsu, using the 5500 and 5800 chips, signalled the beginning of its recovery, but industry observers are more sceptical.

"They've still got a niche position, but it's really niche now," said Andy Brown, research manager for mobile communications with IDC. "They're going to find it really hard going from now on, especially with the industry consolidating. They might want to look at other areas, like embedded chips, where low power is a key play."

Sony recently launched a new PictureBook laptop, the PCG-C1MV, with a 733MHz version of the TM5800 chip. Fujitsu's new LifeBook P-2040 includes an 800MHz TM5800 chip, and the LifeBook P-1000 uses a 700MHz TM5500 chip. The chips -- announced in June 2001, but delayed by production and design problems -- are designed to address complaints that the company's original line of chips did not perform as well as advertised.

But in the meantime, Transmeta's lead over heavyweights like AMD and particularly Intel has become imperceptible. "When Transmeta came to market, they had a compelling offering backed with a lot of heavy marketing. But the other major chip manufacturers have stepped up their concentration on mobile computers now. They made the classic mistake of heavy marketing without the products and without the quality to back it up," Brown said.

Part of the company's problem now is the ambition of its original strategy: to compete head-on with the biggest chip makers on their own turf, by offering superior products. When Transmeta launched, Intel and AMD did not offer much in the way of low-power chips for lightweight laptops, but they have been quick to respond: Intel with SpeedStep and AMD with PowerNow, both technologies designed to reduce chip power usage when it isn't needed.

"Ultraportables are essentially not a consumer play, it's very corporate, and that's Intel's heartland," said Brown. "The benefit in the short term was that Intel had done things very badly in that market."

A sign of the shift since then on Intel's part was the degree to which mobile computing was emphasised at last week's Intel Developer Forum.

Brown said areas that may still be open to a big Transmeta presence might be embedded chips for products such as routers or "blade" servers, although Transmeta's server push has so far failed to gain steam.

The market for PDAs and mobile phones might also be lucrative for Transmeta. Intel is promoting its new Xscale processor for such devices, but does not yet have a dominant presence. Brown also noted that the handheld market seems to be consolidating on the architecture of UK chip designer ARM, with Microsoft standardising its Pocket PC operating system on ARM, and Palm moving to ARM-based processors later this year.