From CNET: Transmeta wins $88 million from AOL, others....Different take on same news....
news.cnet.com
Transmeta wins $88 million from AOL, others
By Stephen Shankland
Staff Writer, CNET News.com
April 24, 2000, 11:20 a.m. PT
URL: news.cnet.com
update Transmeta, which aims to take on Intel in the processor market, announced that it has received $88 million in funding from America Online, Gateway, Compaq Computer, Sony and several major Taiwanese electronics manufacturers in a deal that could lead to an initial public offering later this year.
Transmeta came out of hiding with great fanfare in January, unveiling two chips that the company promises will offer dramatically longer battery life for use in laptops and portable Internet devices. The chips also are compatible with Windows and applications written for the PC, as well as Linux.
Today's funding addresses the concern of analysts who noted in January the conspicuous lack of customers for Transmeta's chips.
"It's a pretty impressive list," said MicroDesign Resources analyst Keith Diefendorff. "It indicates a vote of confidence for the Transmeta approach."
So far, only relatively small companies such as S3 have announced that they will use Transmeta's processors in their Internet appliances. Today's investments indicate that the technology elite see a future for the company's chips.
Transmeta executives also indicated that deals with large manufacturers are in the works.
"The systems are in development," said Jim Chapman, vice president of sales and marketing. "The major product releases will happen around mid-year."
In addition, the recent investment round is likely an indication that the company plans to go public this year. In February, chief executive Dave Ditzel said that the company might seek a final round of financing this year. Another round of financing, sources said at the time, could be seen as a prelude to an IPO.
"We're not really trying to tee up the specific dates on an IPO," Chapman said. "We have not started the (investment) banker evaluation as of this date."
Although no products were announced with the investments, some of the companies investing in Transmeta today have products coming out that seem to be appropriate vehicles for Transmeta's products. Gateway and AOL, for instance, plan on releasing Internet appliances and Web pads late this year. The two companies have relationships with other chip vendors, however; boxes for AOL TV, for instance, are already slated to use chips from Via Technologies and Intel.
Several major laptop makers--notably Dell and Toshiba--didn't make an appearance in this round of funding, said Dataquest analyst Mike McGuire.
"It's interesting that the larger guys aren't in there," he said. "They may not want to get in there early.
"They may have questions of volume," he added, referring to whether Transmeta will be able to ramp up chip production fast enough.
IBM also was not named as an investor today, but the company already has a strong relationship with Transmeta; it will manufacture the company's chips.
The Taiwanese manufacturers that invested in Transmeta include Compal Electronics, Quanta Computer and First International Computer, a company associated with Via. Samsung and Phoenix Technologies also invested.
The corporate partners invested $72 million in Transmeta, the company said. A further $16 million came from existing investors, including Soros Fund Management, Paul Allen's Vulcan Ventures, Tudor Investment, Van Waggoner Capital Management, Invemed Associates, Five Points Capital and Deutsche Bank.
Transmeta took a different approach to cloning Intel chips than have other companies, such as AMD or National Semiconductor. Transmeta relies on "code-morphing software" to translate instructions an Intel chip can understand into instructions the Transmeta chip can understand. The method is faster than traditional emulation because the instructions, once translated, are stored for later use, the company said.
Watch video
In addition, Transmeta has developed "LongRun," a combination of hardware and software that monitors the system to throttle back CPU usage and therefore power consumption as much as possible.
Questions were raised about the performance of Transmeta's combination software-hardware approach at a recent Microprocessor Forum event. But Diefendorff said it appears the technology will be good enough.
"We still have not seen benchmarks and those kinds of things that quantify the specifics, but within some range, I'm pretty confident they'll do what they say they'll do," Diefendorff said. A Transmeta-powered laptop currently has the performance of the fastest Intel-powered laptop running on battery power, Chapman said.
The long-term question for Transmeta is whether Intel, AMD, IBM or some other company could come up with comparable technology. "If Intel really sees Transmeta as some kind of significant market-share threat, what could it do in response that would make Transmeta more miserable? That's unknown at this point," Diefendorff said
Intel released its SpeedStep system in January, under which portable computers run faster when plugged in but become more efficient with power when unplugged. "It's pretty lame power-modulating technology compared to LongRun or even with what we hear AMD is coming up with for their processors," Diefendorff said. However, he noted, Intel is working on a second-generation successor to SpeedStep that's more sophisticated.
Transmeta ties with IBM could give it an edge with future products, Diefendorff said. "Transmeta, by using the IBM fab (chip factory), could potentially soon have access to silicon-on-insulator technology, which would be an additional pretty significant power saving," Diefendorff said. |
