Gates to demo Transmeta webpad at Comdex

Transmeta is expected to receive a major endorsement on Sunday when Microsoft chairman Bill Gates demonstrates a Crusoe-based webpad during his keynote speech at the Comdex trade show.

The demonstration follows Gateway and AOL's unveiling of their long-awaited Transmeta-based webpad in New York on Friday.

The internet device will include a customised version of AOL's internet service that displays web pages, and runs email and personalised information. It is also expected to include home networking functionality from networking chip specialist Broadcom. However, the device, which will be aimed at the US consumer market, is not expected to be available in the UK.

The system will feature specialised applications and databases that turn it from a general-purpose device to one that is tailored to its environment.

Gateway's and Microsoft's announcements will provide a welcome boost to Transmeta, which has had a rollercoaster few weeks.

Recently IBM confirmed it had cancelled plans to include Crusoe in its Thinkpads, and Compaq was this week reported to have also scrapped projects that would have used the processor. Despite the uncertainty, Transmeta doubled the value of its shares on Tuesday during its initial public offering.

However, some analysts believe the question mark surrounding the current commitment of Transmeta's potential original equipment manufacturers will not harm the startup in the long run.

Gartner analyst Martin Reynolds said it is still early days for Transmeta, and that the market will react positively after the company updates the processor.

"Crusoe is ready for an update already, and Transmeta needs to get some system design wins," said Reynolds, adding that the company should include the processing power for audio and video on a single chip system. Transmeta also needs to improve system price and functionality, he said.