Sony Adopts Transmeta's Crusoe from the Fool Aug 15, 2000..
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FOOL PLATE SPECIAL: An Investment Opinion
Sony Adopts Transmeta's Crusoe
Sony has chosen the low-power Crusoe chip for its Vaio C1 PictureBook. Multimedia applications optimally use Transmeta's technology, so the Vaio C1 is the perfect machine to have Crusoe inside. Its specialty niche, however, doesn't seriously threaten Intel's core business.
By Brian Lund (TMF Tardior)
August 15, 2000
Sony Corp. (NYSE: SNE), the world's second-largest manufacturer of consumer electronics, will adopt the Crusoe processor, designed by privately held Transmeta Corp., in its Vaio C1 line of notebook computers, according to press reports. That would displace Intel's (Nasdaq: INTC) Pentium processor.
Is Rule Maker Intel in trouble? Has Transmeta usurped power in the microprocessor kingdom? It might be a bit early to write Intel's eulogy.
Linux developer Linus Torvalds fronts Transmeta, backed by Microsoft (Nasdaq: MSFT) co-founder Paul Allen and financier George Soros. The company unveiled the Crusoe microprocessor in January after five years of closed-door development. Crusoe caused quite a stir in the computing world, since it claimed to run as fast as Intel's processors, but use less energy -- an ideal combination for mobile computing.
Crusoe Fits Sony's Vaio Perfectly
Sony's Vaio C1 is the ideal app for Crusoe. It's an ultra-light "PictureBook," weighing in at 2.2 pounds with a small 8.9 inch screen. It is designed to capture and store video and still images in an easily transportable device, but it also lends itself to MP3 storage and playback. This product is part of Sony's effort to integrate a series of specialty electrical appliances, including the MusicClip player for music files.
These are optimal applications for the Crusoe processor. The key to the Crusoe is a code-morphing software layer that searches out repetitive sequences and reduces them to a smaller set of instructions. Multimedia applications are processor hogs, but they make heavy use of repetitive sequences of commands.
According to a Gartner Group report on Transmeta, Crusoe produces a 23% net power-saving advantage over the Pentium III when running Office 2000 applications. When playing back a DVD, the advantage jumps to 48%. For MP3 playback, which avoids the big power drain of the computer's screen, Crusoe runs almost 80% more efficiently than the Pentium III.
Crusoe in Specialty Devices Doesn't Threaten Intel
It's not surprising, then, that Sony would want to use Crusoe in a device like the Vaio C1. It's also not surprising that America Online (NYSE: AOL) and Gateway (NYSE: GTW) have said that they will use Crusoe in an Internet appliance they are jointly developing. Don't be shocked, too, to hear that all three of these companies participated in an $88 million round of funding for Transmeta in April.
Nevertheless, they are using Crusoe for very application-specific, niche products. Only IBM (NYSE: IBM) has announced that it will use Crusoe in a general-use ThinkPad product, but IBM is a bit biased since it fabricates and packages the Crusoe processor for Transmeta. So far, Transmeta has not threatened Intel's core business. Today's news also doesn't ring the death knell for Intel, and that Intel shares didn't move much this morning probably underscores that point.
It does, however, give the chipmaking giant something to think about.
Your Turn:
Stop by the Intel discussion board, hear others' thoughts on the news, and offer your own opinion.
Related Links:
Transmeta website FAQ
Sony home page Fool News, 1/20/00:
Transfixed by Transmeta
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