Transmeta Corp. is about to get a potentially lucrative new sales channel. 

The Santa Clara, Calif.-based processor company has struck a deal with its former rival, the much larger Advanced Micro Devices, to re-brand and sell a specialized version of Transmeta’s Efficeon microprocessor in emerging markets.

Financial terms of the deal were not disclosed. The agreement marks the first collaboration of any kind between Transmeta and AMD.

Under the arrangement, AMD will buy FlexGo customized Efficeon CPUs from Transmeta and then re-brand them as AMD Efficeons, according to Transmeta CEO Art Swift.  AMD will then market, sell and support the devices.

The AMD Efficeon was specifically designed by Transmeta to provide a secure hardware foundation for FlexGo, Microsoft Corp.’s new technology that enables pay-as-you-go computing models.  The AMD Efficeon offers CPU-level security that delivers asset protection for new business models that are enabled by FlexGo, Transmeta said.

“The Efficeon processor, due to its unique architecture, is the first microprocessor to support the FlexGo instructions within the microprocessor, and we believe that it is the most secure FlexGo implementation,” Swift said.

The companies believe that the deal will accelerate AMD's 50x15 initiative. Under 50x15, AMD is establishing a global network of partners and business models to help connect 50 percent of the world's population to the Internet by the year 2015. Current global Internet penetration stands at about 15 percent, AMD said.

The AMD Efficeon product is now being used in the second Brazil FlexGo trials that were launched by Microsoft last month.

"The Efficeon processor will allow consumers in high-growth markets to obtain computers that are provided on a pre-paid basis using either tokens or pre-paid activation cards,” said Billy Edwards, AMD chief innovation officer and senior VP, in a statement. “This same business model was instrumental in establishing massive global penetration for cell phones and we believe we can adapt it specifically to achieve the goals of AMD's 50x15 Initiative."

Transmeta was formed in the 1990s as an upstart processor company that sought to challenge the market dominance of AMD and industry giant Intel. But while the company’s power efficient technology was lauded, it could not match the R&D and manufacturing might of its two much larger rivals.  A year ago executives restructured Transmeta into primarily an IP licensing and services company. The company is still continuing sales of its second generation x86 processor, the Efficeon.

By: DocMemory
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