Transmeta Corp., a developer of mobile microprocessors, Tuesday announced that it will increase its business focus on the licensing of its intellectual property and advanced technologies in 2005. Some analysts instantly claimed that the company may leave the central processing units business eventually.
“Transmeta has spent a decade developing world class microprocessor technology, microprocessor products and related intellectual property. By modifying our business model to focus more on our licensing opportunities, leveraging our substantial IP portfolio and our R&D capabilities, we would expect to reduce our cash needs substantially and to improve our results for our shareholders,” stated Matthew R. Perry, president and CEO, Transmeta Corporation.
Transmeta said it would complete a critical evaluation of the economics of its current business model of designing, developing and selling x86-compatible microprocessor products, including its Crusoe and Efficeon families, in January 2005. The company’s management is completing a critical review of its current business model, including an evaluation of its customer requirements and the economics and competitive conditions in the market for x86-compatible microprocessors.
Transmeta lost millions of US dollars throughout its 10 years history trying to sell microprocessors.
Over the last two years, Transmeta has worked to establish a revenue stream based upon the licensing of its proprietary technology and intellectual property. The company granted licenses to NEC Electronics and Fujitsu Limited to use Transmeta’s LongRun2 technologies for power management and transistor leakage control.
Transmeta management expects to complete its business model evaluation and planning with the company's Board of Directors in January 2005. The company presently expects to make an announcement and hold a conference call regarding its 2005 business model on January 21, 2005.
At this point it is unclear, whether Transmeta wants its IP licensing efforts to become the primary source for revenues, or still wants to sell chips.