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Transmeta scores Gateway-AOL Linux appliance deal

A product? Things are obviously starting to look up...

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Gateway and AOL are to become Transmeta's first announced major customers. The grand unveiling of a Linux Internet appliance is scheduled to take place later today, but Transmeta's flair for publicity doesn't seem to have tarnished in the three months purdah since it announced, and even seems to have rubbed off on its partners a tad.

So they've been leaking like crazy to their special friends in the public prints. According to Transmeta's Dave Ditzel, the first appliance will ship in Q4, and will use a wired connection to the Internet. He also trails future wireless versions in an unspecified timeframe, but we wouldn't hold out hope for these any time soon; WebPad-type devices are superficially attractive, but just figuring out which wireless standard to use will likely add six to nine months to development time.

Gateway intends to sell the devices through its stores, while AOL will market them direct to subscribers, or so it says anyway. Gateway CTO Peter Ashkin claims to the New York Times that the price hasn't been determined, but that the target is sub-$500. But we don't believe that entirely.

Unless it's a lot sub-$500, it's going to have to compete with low-end PCs as access devices. The machines will include AOL access software, so we'd guess maybe $399 or $499 for the raw machine, with no strings, and anything as low as $99 or even zero for one sold with a two to three year AOL contract.

That ought to make subsidised machines with Gateway subscriptions walk off the shelves, which is presumably the objective of the Gateway-AOL alliance. The expectation is that they'll ship in tens of thousands this year, and hundreds of thousands next.

Some interesting sidelights from the holiday weekend's leak-fest. Rob Enderle of Giga isn't leaking, but we expect he's been leaked to, when he tells the WSJ that he expects Compaq and IBM to come out with Transmeta laptops later this year. Gateway also seems to have given the WSJ the impression that it intends to increase the amount of chips it buys from AMD this year. But the company's possibly just trying to tease Chipzilla. ®

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