New chips promise ever-smaller e-gadgets

Chip unveiled this week is one example of how dynamic the mobile market

American consumers are increasingly taking their computer habit on the road. And that is creating a newly competitive high-tech landscape that should spark renewed creativity and benefit consumers who want to be able to surf the Web even at the beach.

Indeed, analysts say consumers should expect a flood of new ideas, new products, and new players in the realm of mobile devices. That's because an industry that once seemed a mere offshoot of traditional computers is now standing fully upright on its own.

The promise of this market was evident this week when a team of technology heavyweights unveiled a new chip designed to meet the distinct needs of these mobile devices, which range from "smart" cell phones to computer notebooks and personal digital assistants.

Fledgling Transmeta Corp. of Santa Clara, Calif., unveiled a new line of processors under the brand name Crusoe, which it claims are more energy efficient and more adaptable, without sacrificing performance, than are those of its competitors.

The marketplace will ultimately decide whether the Crusoe chip is a substantial advance. Early reviews were mixed, though most agreed the new chips use only a fraction of the battery power that their competitors do, a key advantage with portable products.

But the mere existence of Transmeta, and its pedigree of employees and backers (who include Microsoft cofounder Paul Allen and financier George Soros), speak to how dynamic and wide open the mobile, hand-held devices market is, say analysts.

"In the personal computer market, there is clearly a maturing going on," says Mario Morales, a semiconductor analyst with International Data Corp. (IDC). "But outside of PCs, in the mobile market, the field is really wide open."

Breaking open the market

Launching a chip business in the traditional computer industry would be a daunting, possibly foolhardy proposition. Intel Corp., based in Santa Clara, has more than 82 percent of the chip market, making it nearly as dominant in that field as Microsoft is in operating systems.

But while Intel chips already rule the notebook-computer niche, the markets for hand-held devices, like the popular Palm Pilot, have a whole new cast of competitors. Hitachi, Toshiba, NEC, and ST Micro are strong players in much of the mobile market, says Mr. Morales.

According to IDC, the mobile-devices market is poised for spectacular growth. Worldwide, there are about 26 million devices in use, a number that will leap to about 67 million by 2003.

One of the hopes in the emerging mobile market is that it will create products that are compatible with many other computer components - not built with only one product in mind, the way Intel chips are designed to work with Microsoft's Windows.

The other goal many aim for is products that can be adapted to evolving technology, rather than simply replaced.

"Some consumers are starting to get really upset that many of these products only last for six to nine months before they're obsolete," says Richard Doherty, director of research at Envisioneering Inc. in Seaford, N.Y.

Watch TV on your phone

Few expect mobile products to replace desktop computers anytime soon. Rather, what many analysts see is a continuing process of convergence across the entire computer field, with a winnowing of products that will allow consumers to access TV, the Internet, and various forms of communication through single devices.

"Mobile phones are going to need to be vehicles for the Internet, television, interactive games, and even access to 'smart' devices in the home," says Max Nikias, director of the Integrated Media Systems Center at the University of Southern California.

Convergence doesn't necessarily mean that the mobile world will settle on only one product. In fact, IDC mobile devices analyst Diana Hwang says most of the products in existence today will survive. But they will need overlapping functions, so that consumers can do a range of things from wherever they are.

While the mobile market may be particularly vibrant right now, Mr. Nikias says the computer industry in general is in need of a breakthrough.

Recent years have seen a number of advances, but he considers them more in the category of product improvement than groundbreaking innovation on par with the development of the personal computer or the popularization of the Internet.

(c) Copyright 2000. The Christian Science Publishing Society