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It's easy to forget that, underneath the hype and for all the OEM contract wins, Transmeta is still a pretty puny company.

The low-power, code-morphing Crusoe mobile CPU designer had revenues of $12.4 million in Q4, pretty damn good compared with Q3, when it did $3.5 million, and awesome compared with Q4, 1999 when it did zip. Transmeta forecasts that revenues will leap another 50 per cent in Q1, while margins will inch forward two more points to 44 per cent, on the back of improved yields as production of its low-powered chip ramps.

But it has not been particularly forthcoming in explaining how it will control ballooning losses. For Q4 2000 the company posted a pro forma net loss of $17.3 million (Q4 1999: $12.9 million), or 20 cents a share. Add in some specials - amortisation of deferred charges, for one - and the real net loss rises to $26.2 million.

For the full year, Transmeta lost a hefty "actual" $97.7 million (1999: -$41.1 million). Of course, it is still very much in business (as opposed to technology) start-up mode. Losses are only to be expected at this stage, and the company has a comfortable nest-egg accumulated through its IPO last November; this will see it able to shoulder losses comfortably for quite some time.

However, Transmeta shareholders will want to see the cost base - currently around $100 million a year - kept under control. As a start, the company says its business and R&D expenses should stay flat in Q1, compared with the previous quarter, at around $26 million. ®

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