AMD to resell Transmeta chip for pay-as-you-go PCs

Advanced Micro Devices will resell a processor Transmeta designed for Microsoft's pay-as-you-go PC initiative as part of a strategy to connect people in developing countries to the Internet, Transmeta said Monday.

AMD plans to market and sell the Transmeta chip, called the Efficeon microprocessor, in underdeveloped countries where many people do not own PCs or have access to the Internet. Transmeta designed a specialized version of a processor it already had, called Efficeon, to be a part of Microsoft's FlexGo prepaid PC plan.

FlexGo is the name for a combination of hardware and software that enables Windows PCs to be sold and used on a pay-as-you-go basis, much like wireless phones.

"For the first time, Transmeta and the Efficeon technology will have the brand and power and reach of AMD," said Art Swift, president and chief executive officer of Transmeta. "[Our goal is] to reach as many consumers in the world as possible in emerging markets."

The specific terms of the deal were not disclosed, but Swift said AMD and Transmeta have an exclusive arrangement for AMD to brand the specialized Efficeon chip under its own name and resell it around the world.

AMD plans to use Microsoft FlexGo and its Efficeon deal with Transmeta as part of its 50X15 initiative, which aims to build a global network of partners and business models to help connect 50 percent of the world's population to the Internet by 2015.

Two weeks ago, Microsoft started trials of FlexGo PCs in developing nations as a way to give residents of those countries access to low-cost computers. Microsoft and its hardware partners are selling the prepaid PCs in retail outlets in Brazil, Mexico, Russia, India and China.

A user will buy a PC for about $300 in local retail stores and will be given a certain amount of time on the system. The FlexGo technology includes built-in metering that tracks usage and alerts a user when they are running low on time.

As time begins to run out, the PC will shut down certain functions, going into "reserve mode" so a user knows to buy more usage time. Users can buy this time over the Internet or through prepaid cards. If usage time runs out completely on a FlexGo PC, the technology locks the machine until a user buys a new card.