Transmeta (Semiconductor) (TMTA)

[DewDiligence]

Lojjm: your post nicely sums up my investment thesis for TMTA. The only thing I would state differently is your hope that, in terms of market share, TMTA can become in the mobile space what AMD is in the desktop space.

The analogy I prefer is JNPR vs CSCO in high-end routers. But first, let me return to AMD, which got its start in x86 compatible CPU’s as a second source (i.e. clone) for companies such as IBM which did not wish to rely on a single company (INTC) for the PC microprocessor. That AMD evolved into a full-fledged R&D shop is an accident of history owing to the favorable settlement of legal disputes with INTC.

JNPR, on the other hand, was conceived in a way very similar to TMTA. JNPR took aim at a relatively small portion of the router market (high-end routers for telecom carriers) and succeeded in capturing 20%+ market share despite the fact that industry experts predicted no one could possibly compete head-to-head with a company as formidable as CSCO. (Alas, JNPR has been felled by the malaise in the telecom sector, but that’s another story.)

If TMTA can accomplish as much against INTC as JNPR has against CSCO, TMTA shareholders will do very, very well over the next 5 years. And that’s not an unrealistic goal. JMHO. Dew