Will Linus' New Chip Revolutionize E-Commerce?

One of Silicon Valley's most secretive companies, Transmeta Corp., has sparked a flurry of speculation by scheduling a press conference for Wednesday.

The Santa Clara, California-based company is going to unveil its mysterious Crusoe microprocessor, which, according to its Web site, will "create a whole new world of mobility."

Rumors are flying throughout the high-tech community that the Crusoe chip will radically change online computing -- affecting notebook computers and Internet appliances initially, but then eventually cellular phones and other handheld devices.

Backed By Heavy Hitters

Transmeta is backed by a group of heavy hitters, including Microsoft (Nasdaq: MSFT) co-founder Paul Allen, billionaire investor George Soros, and venture capital firms such as Institutional Venture Partners, Integral Capital Partners and Tudor Investments.

However, the fact that Linux operating system creator Linus Torvalds has joined the company is really pushing expectations into the stratosphere. In fact, Torvalds' presence has sparked persistent rumors that the new Crusoe processor will power Linux-based devices.

Still others say that Torvalds was brought on board because his programming expertise was needed to iron out Transmeta's complex product designs, which are said to put much of the chip's functions in the software rather than the hardware.

Low-Power Consuming Chips

Some industry observers are whispering that Transmeta has successfully developed a very low power-consuming chip that is capable of mimicking any microprocessor's architecture. The significance of this development -- if true -- is that any standard PC application would be able to run on Crusoe-powered, Internet-enabled devices.

Additionally, many believe that the new chip uses only two watts of power compared with the 10 to 15 watts of electricity being used by the current Intel (Nasdaq: INTC) chip in mobile devices.

Could Bring E-Commerce To Masses

If all the hype and speculation turn out to be true, it would have a profound effect on e-commerce. Imagine a lighter chip that uses less energy, running on a free Linux operating system.

Manufacturers of handheld devices could use such a chip to lower the cost of their units and make them more affordable for the masses. If handheld units drop in price to under $100 (US$), the real e-commerce floodgates could swing wide open.

Nonetheless, great expectations have been dashed many times in the past, when the unveiling of a new product ends up being much more hype than substance.

That said, it is my feeling that Transmeta will be the exception, rather than the rule. Look for something exciting to happen.

What do you think? Let's talk about it.