Intel's Travails: Once and Future Notebook King?

By the second quarter of this year, AMD's Athlon desktop processor had snatched 10 per cent of the high-end desktop market from Intel's once-unchallenged dominance, according to Mercury Research. Now, AMD hopes to strike at Intel with the mobile version of the popular chip, says Martin Booth, product marketing manager for AMD's computation products group. The mobile Athlon chip is due out later this year.

The company will also launch a mobile version of its lower-end Duron processor, he says. AMD hopes the Duron can build upon the success of its low-cost mobile K6 processors, which make up 18 per cent of the worldwide mobile processor market, according to Mercury Research. (Intel owns the rest.) It's clear the mobile Athlon will compete with Intel's mobile Pentium III products, and the Duron with Intel's mobile Celeron products. Beyond that, AMD has revealed few details about its upcoming chips.

However, it's likely that at least the Athlon processors will include the company's battery-saving technology called PowerNow, which is similar to Intel's established SpeedStep technology.

Wooing the Corporations

AMD's success with the desktop Athlon, and its continued strong showing in the low-end mobile market with its K6 products, gives the company a fighting chance, says Mike Feibus, principal analyst at Mercury Research.

And the early word from vendors is the mobile Athlon looks strong in test systems, he says. Nobody has announced anything yet, but major vendors are very pleased with the chip's early performance numbers, he says.

"AMD will challenge Intel in the high-end portable PC market," he predicts.

However, for AMD to find true success -- and substantial market share -- it must win corporate buyers, he says. "The next major battleground is corporate -- both desktop and mobile," he says.

That could be tough. Despite its success with home and small-office computer users, the desktop Athlon has yet to significantly breach the corporate desktop market. There, buyers are typically more conservative and tend to stick with what they know, which is Intel, Feibus says. The company could face the same problem with corporate notebooks.

Intel currently owns the corporate notebook market and is working hard to convince vendors it should remain that way, he says. However, if the Athlon performs well, and AMD can win over just one corporate vendor, the rest may follow, he says.

Challenger Transmeta Rides the Hype

AMD has at least proven it can legitimately challenge Intel. Transmeta, on the other hand, is a new company with only a single shipped product to demonstrate its viability: Sony's new ultraportable PictureBook. But what the company lacks in history it makes up in hype.

Early this year, Transmeta announced its Crusoe chip, a different kind of processor that works with special software to convince an application it is running on a regular x86 CPU.

Combined with its LongRun power management technology, Crusoe is designed to minimise power consumption and significantly increase the battery life of an ultraportable notebook, Transmeta claims. Running a notebook all day on a single charge is not out of reach, the company says.

Analysts are expressing doubts about any processor's capability to significantly extend a notebook's battery life. SpeedStep, PowerNow, and LongRun are more about marketing than actual battery savings, says Dean McCarron, another principal analyst with Mercury Research. After all, components such as displays and hard drives still require plenty of juice.

Transmeta has overmarketed its chips' capabilities, McCarron continues. "Massive extension of battery life is unrealistic." Even if you removed the processor completely you couldn't radically increase battery life, he says. Feibus agrees.

Chip Still Unproven

Because so few products using the Crusoe chip have shipped, there's no reliable way yet to measure Transmeta's claims. However, despite such skepticism, the company has received financial backing from numerous big-time PC vendors, many of which have promised Transmeta-based products.

Transmeta's normally talkative executives declined to comment for this article because the company is in a quiet period before its planned initial public offering, according to a spokesperson.

Despite the naysayers, Transmeta's product should find some success in the ultraportable market, says Mario Morales, program director for semiconductors at IDC. If the company picks its market carefully, it could become a strong niche player. But Transmeta has a long way to go, and it's unlikely it will actually challenge Intel, he says.

Intel executives couldn't agree more.

Despite Challenges, Intel's on Top

"We've been in a top position, and periodically someone will take a run at [us]," says Howard High, Intel spokesperson.

Transmeta is gearing for its run now, he says. It's the preseason, and nobody has seen the product yet. "People are giving them the benefit of the doubt, but we'll see what happens when they get product out there," High adds.

He points to another hyped competitor that promised to challenge Intel. Remember the Oracle Network Computer (aka NC)? What happened there? High asks rhetorically. Intel's lower-cost, higher performance chips made it possible to create a cheaper PC that could compete with the NC, he says.

Not an Easy Road

Intel intends to make it difficult for either competitor to successfully challenge it by offering strong products that cover all possible mobile needs, says Don MacDonald, director of marketing for Intel's mobile platform group.

The company sees markets for processors in four main types of mobile systems: high-performance desktop-replacement systems, high-performance thin-and-light units, ultraportable products, and ultra battery life/fanless devices.

MacDonald says he's confident Intel will have the products to serve all four markets -- and the production capabilities to ship them in volume when they're announced. (Intel has been criticised in recent months for announcing high-end desktop processors before it could ship them in volume.) Intel will also draw on its long history in mobile products, and its deep well of technology, to defend its territory, he says. The company has 11 years of mobile processor expertise, and a portfolio of technology that gives it an advantage today and going forward, he says.

Plus, McDonald says, the company has one other outstanding advantage: "Our products are shipping today."

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