UPDATE: Transmeta's big blow from Big Blue

IBM cancels a project to create a ThinkPad mini-notebook with the low-power Crusoe chip

In a blow to high-profile chipmaker Transmeta, IBM has canceled a project aimed at building a ThinkPad mini-notebook using Transmeta's Crusoe processor.

Big Blue said it is still evaluating Transmeta's low-power chip technology for future products.

The question now is will IBM's decision injure Transmeta's ability to sign up other PC manufacturers in its pitched battle against chip rivals Intel and Advanced Micro Devices?

"This particular project with Transmeta, the ThinkPad 240 with a Crusoe chip, is canceled," said IBM spokesman Ray Gorman.

"We are always looking for technology that will enhance the notebook computing experience, and will continue to consider Transmeta, along with other suppliers, for future ThinkPad models," he said.

IBM had been bullish on the Transmeta chip.

"What we see here is the potential to solve the two biggest frustration factors that mobile users face today," Leo Suarez, director of worldwide product marketing for ThinkPad, told ZDNet News last June.

IBM conducted "Frustration studies", which showed that some users want a small notebook, weighing about three pounds, with "all day" (meaning eight hours or more) battery life, he said.

"If we can do that, we'll bring it out in the fall," Suarez said at the time. "We're pretty confident that we can get close to that eight-hour mark."

However, sources indicated that the project was canceled due to the prototype ThinkPad 240 delivering shorter-than-expected battery life. Reviewers have reported only two-and-a-half to three-hour battery life with the chip, hardly an improvement over competing notebooks.

Transmeta, whose initial public offering of stock is planned for next week, has also come under fire for the relatively low performance of notebooks such as Sony's VAIO PictureBook notebook. The PictureBook is based on a 600MHz Crusoe TM5600 chip. PC Magazine tests of the notebook showed it performing relatively poorly when subjected to benchmarks measuring performance and battery life.

However, company executives responded to those reviews, saying the most important benchmark that consumers should measure it by is battery life.

"The VAIO is a 2.2-pound machine. For 2.2 pounds you get a three-cell battery," said Ed McKernan, director of marketing for Transmeta in a recent interview with ZDNet News.

He said performance was on a par with competing machines. "I think once you get one of these in your hands... that you're not going to notice any difference" when compared with another notebook in its class, McKernan said. "We haven't seen an application out there where we've seen any significant difference with [notebooks-based on] Intel."

Transmeta is also now working with several benchmark organizations to have them better understand the way its Crusoe chips work.

The company could not comment on the IBM news because of a blackout period for the pending IPO.

Transmeta's Crusoe is "very new technology", said Martin Reynolds, an analyst covering microprocessors for Dataquest. PC makers generally take some time to evaluate new technology before basing products on it, he said.

For that reason, "It's no big surprise. It's something that at this stage of its life, it's no big deal," he said. "The challenge that Transmeta faces is that it has to advance its technology."

Aside from Sony and NEC, which have Crusoe-based notebooks in production, IBM is one of only a few major PC makers to publicly acknowledge that it was working with Transmeta.

Hitachi recently announced its line of Transmeta-based notebooks, which it says will deliver between 4.3 to 4.7 hours of battery life (depending on screen size) on its standard battery.

See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta.

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