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Transmeta targets Intel's mobile underbelly

There's margins and there's gross margins

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While folk in Blighty were noshing away at their choccie Easter eggs yesterday, start-up Transmeta was busy announcing support for its range of x86 mobile processors to the tune of a $73 million investment from some heavyweight PC names. Transmeta also got additional dosh from some world class financial investors to the tune of $15 million, including the Deutsche Bank and Soros Fund Management, it said in a statement. The firm has received money from Compaq, Gateway, Sony, Samsung, AOL and Phoenix, it announced. Taiwanese firms Quanta, Compal and FIC also announced investments, and although these last three may not be household names, they are significant wins. All three have massive OEM deals with a number of the big names in computing, including Dell and IBM as well as some of the usual suspects mentioned in the previous paragraph. The firm's Crusoe microprocessors offer low power capabilities along with x86 capability, and the announcement is significant because of the virtual stranglehold Intel has held on the top end of the notebook chip market. Notebook PCs, far from being a commodity, like run-of-the-mill x86-based desktops, typically attract a high cost and Intel's margins on the processors are also typically robust. In some respects, that has allowed Intel to subsidise less profitable microprocessors, such as its cut-down Celeron microprocessor. Although AMD has made inroads into Intel's notebook market share, so far this has been very much at the retail end of the market, with large corporate buyers still going for the high-end x86 option. The arrival of major US PC firms, as well as major Taiwanese players, may well herald a sea-change in the existing market. And the fact that AOL has put its money into Transmeta suggests a more far reaching strategy than the world had previously suspected. That is likely to further concern senior management at Intel's HQ in Santa Clara. ®

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