Transmeta wins big with Toshiba laptop

The notebook maker will produce a Crusoe-based Libretto mini-notebook, the L1/060TNMM, that will ship May 18 in Japan.

With the Toshiba agreement under its belt, Transmeta is on a roll, having gained the business of a number of Japanese PC makers since last fall. Sources close to the company say that a notebook deal from a larger PC maker, such as Compaq Computer, isn't out of the question before the end of the year.

Toshiba's new notebook will be introduced in North America in the third quarter, according to sources familiar with Toshiba's plans. It is likely to be labeled a Portege model outside Japan.

When it arrives on that continent, the notebook will join Sony's Crusoe-powered Vaio, NEC's Versa Ultralight and a new entrant from Casio. The Casio Fiva notebook will land in North America later in the week, sources said.

The Toshiba notebook, however, will represent the first such notebook from a major player in the PC business to hit North America. While Sony and NEC both sell a respectable number of notebooks each year, Toshiba is the market leader worldwide. It is No. 3 in the United States, behind Dell Computer and Compaq, according to IDC figures for the first quarter of 2001.

At 10.5 inches wide, 6.6 inches deep and 0.8 inch thick, and weighing 2.4 pounds, the Toshiba machine falls into the mini-notebook, or subnotebook, category. It also offers a 10-inch polysilicon active-matrix display and a 10GB hard drive, along with Transmeta's 600MHz chip. It will sell for about $1,700.

Transmeta representatives would not comment on when the notebook will ship in North America.

"Our strategy is to win big with Japan and then export the success into the USA and Europe," said James Chapman, executive vice president of sales and marketing for Transmeta.

A "big win"
"It is a big win," said Alan Promisel, senior analyst with market researcher IDC. "It definitely helps Transmeta gain yet another foothold in the U.S. market."

But it doesn't boost the likelihood that other PC makers will follow Toshiba and use Crusoe, he said.

"There is the option of using Intel (processors) that give similar performance and power management," Promisel said. However, he added, "it does put pressure on (PC makers) to address the subnotebook market."

The North American PC divisions of Compaq and IBM both have made well-publicized decisions to skip the first round of Transmeta chips.

But Transmeta believes its next round of chips, starting with the TM 5800, and new versions of its Code Morphing Software will convince PC makers designing new ultra-portable notebooks to take a look at Crusoe, thanks to additional power savings and performance.

"We're making continuous improvements to the Crusoe architecture...so we are getting more competitive than anyone thought we would be," Chapman said.

So competitive that sources suggest IBM or Compaq will release a notebook using a Crusoe chip before the end of the year.

Beginning with the TM 5800 chip, Transmeta will reduce power consumption by about 20 percent and raise clock speed to as high as 800MHz by moving to a newer 0.13-micron manufacturing process. Migrating from one process to another, such as from 0.18 to 0.13, allows a chipmaker to increase clock speed and reduce power consumption by printing smaller circuits on the chip.

Transmeta also plans to introduce two brand-new processor cores in 2002 to help it become more competitive with Intel.

A new 256-bit processor design will offer additional performance by processing data in bigger chunks. A second new design will be 50 percent smaller than the current Crusoe chips. This will help Transmeta reduce its power consumption and at the same time cut prices.

Chapman said the chip will be ideal for a forthcoming batch of "highly mobile products, such as (Microsoft's) Tablet PC and wireless devices that are between a Palm VII and a low-end notebook."

Chips based on this new 128-bit design will not ship until the second half of 2002.

It's unclear if corporate buyers in North America will embrace the Toshiba notebook or NEC's offerings, which are also aimed at business users. However, Transmeta executives believe the company can increase the number of small notebooks its chips are sold in by increasing performance and decreasing power consumption.

"We are going to own this space," Chapman said.