Intel has warned that Transmeta's Crusoe processor suffers from compatibility problems with existing PC architectures.
Analysts said the criticism shows the startup is "playing a dangerous game" in targeting the chip giant's core business.
Don MacDonald, director of marketing for Intel's mobile platform group, said there were doubts whether Transmeta's Crusoe chip is fully compatible with x86, a standard for microprocessor design and manufacture established by Intel and supported on its processors.
An Intel spokesman said: "Transmeta has an issue in terms of full compatibility with what people are using today, the Pentium III. It doesn't support Pentium III's streaming SIMD [Single Instruction Multiple Data] extensions, which accelerates audio and video processing."
He added the processor does not support Intel's SpeedStep technology, which is geared to lengthening laptop battery life by matching power consumption to processor demand.
Analysts said lack of SIMD support, an extension to the x86 instruction set, will not impair core functionality and said the Crusoe incorporated its own power saving technology.
A notebook based on the Crusoe chip, and weighing around three pounds, could potentially run for eight hours before running out of battery life, compared with only a couple of hours on current high-power ultralight notebooks.
Andy Brown, a senior analyst with IDC, said: "SIMD is used on the Pentium III for 3D graphics monitoring and better definition. Supporting this is not Transmeta's primary concern - which is running processors at a lower wattage and extending battery life."
Brown said the criticism from Intel showed Transmeta was "playing a dangerous game" in targeting the notepad market, where Intel is particularly strong, and that it might do better to go after the appliance and handheld markets.
"Intel will not make the same mistake with Transmeta as it did with AMD's K6-2. It was slow to react with the Celeron chip and allowed AMD to push into the lower end of the market," he said. He added that Tranmeta needed to show industry backing, beyond demonstrating its technology with a few hardware partners.
Transmeta was unavailable for comment.
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