Transmeta vanishing into the background

Microprocessor star-up Transmeta appears in danger of becoming little more than a ‘cosmic background noise’ in the microprocessor market share battle. The Sunnyvale firm said sales in the current quarter will be flat from the $18.6 million sold in the just-ended first quarter.

Analysts immediately voiced concerns that without continued strong forward sales momentum, Transmeta will quickly cease to be a factor in the microprocessor market. Although it is used in laptops from Sony, Hitachi and NEC, sales appear to have stalled.

As a result, first-quarter losses widened to $22.7 million from $20 million a year earlier. Traditionally, a major sales stall at this critical phase of a high-tech start-up’s development is deadly. It is a snowball effect in which the company will fail to sign up new volume-consuming customers.

This in turn will cause existing customers to lose interest and resort to other suppliers like Intel and AMD.