Behold Transmeta

Transmeta Corp., most famous for being the employer of Linux creator Linus Torvalds, finally pulled the covers off of its business today. It turns out that the formerly secretive company is positioning itself to compete with Intel, using designs that can power a new breed of Internet devices.

Despite having roughly 200 employees and garnering intense speculation over the company's business, Transmeta has managed to keep a tight lid on what it actually does until now. For some employees, the announcement was a relief.

Rahul Patel, a programmer for Transmeta, says that he couldn't even tell his mother what he did for a living.

So, what exactly does Transmeta do? Essentially, it's creating a microchip that eliminates much of the silicon used in traditional chips and instead performs functions in software. It's a novel approach to chipmaking, one that will allow for the production of low-cost chips that use less power but run the same software as Intel chips.

Transmeta is hoping to drive the creation of new mobile, handheld devices, using its chips and a version of Linux, called mobile Linux, that will be able to run Internet and traditional desktop applications. The company showed a bevy of possible devices. Some looked like tablets; others, like small, lightweight laptops.

Although Linus Torvalds has earned the company much of its fame, he is not actually one of the company's leaders. Instead, he will serve as a software engineer. His participation in today's announcement was limited to a question-and-answer session - in which most of the questions went to him - and a short demo, wherein a fellow engineer beat him soundly in a game of Quake. To be fair to Torvalds, it should be pointed out that the other engineer had helped to create the game.

Torvalds says he's pleased with his role and his future with the company. "When I came over the first time, I had to sign a [nondisclosure agreement] just to know what the hell they were doing," says Torvalds. "I decided if I had to go to work for a company, I want to go to work for someone doing something fun."

Going forward, Torvalds will continue to work on Linux development, both for the company and with the Linux community at large.

Transmeta executives claim to have no immediate competitor, but the company could face a strong challenge from Intel's StrongARM processor, a small, robust chip that consumes little power. Transmeta engineers counter that their chips are more functional and can run the applications that people want.

While Transmeta expects to earn some revenues from traditional laptop sales, the company is banking on an emerging breed of Web appliances - bigger than Palm Pilots, but lighter than laptops - for future revenues. Essentially, the company is looking for sales in a market that doesn't exist yet.

The company did not answer questions about how many chips were in production, and refused to say how many, if any, customers and partners had been lined up to use Transmeta chips.

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