Bill Gates has argued throughout the U.S. government’s antitrust suit against his company that Microsoft had to be aggressive because the slightest hesitation or complacency would jeopardize its status. Technology is moving so fast, he claims, that his empire could collapse tomorrow.

Yeah, right. Microsoft doesn’t just dominate the PC market, it virtually owns it. There are some Mac diehards, but they are dreamers or fetishists — or worse, designers.

But maybe Gates is right. While it’s awfully optimistic — or foolish or fantastic — to call a new chip a direct threat to Microsoft’s empire, Transmeta’s new semiconductor does hold the promise, or the threat, of a new computing world.

For consumers, only two dimensions really matter: size and speed, and the latter is the only thing we actually brag about. A few years ago, 133-Mhz got the glands going. Nowadays, 500-Mhz is commonplace and the race for the gigahertz chip is almost over.

The real breakthrough in computer-chip design occurred earlier this year, when a small, privately held company called Transmeta unveiled its first product. Even before the event, Transmeta was the buzz of Silicon Valley: Shareholders included some of the biggest names in the business, and tantalizing rumors swirled around the labs.

The chip that debuted that day was the Crusoe and if it lives up to its promise, it could transform the computer industry. Crusoe is special for two reasons: First, it’s smaller, cheaper and runs on very little power — about one-tenth what a comparable Intel chip would use. The first two are always welcome, but the last item is the money-maker. Where is the weight in your computer or your PDA? In the battery. What is the biggest pain when dealing with electronic devices? Keeping the battery charged. Cut power demands and you increase mobility, flexibility and usability. Imagine what you could do if your laptop ran all day on one battery; one report says Crusoe can do that. Entirely new classes of devices become possible.

The second feature of Crusoe was also a bombshell: It morphs. Unlike every other computer chip that does what it is designed to do at the speed it was designed to run at, Crusoe can alter itself.

A semiconductor is a microprocessor that runs coded instructions to transmit and direct electronic impulses around the circuitry. Crusoe’s processor, however, is wrapped in another software code that acts as a translator for other codes. So, software written for, say, a Pentium chip can be “translated” into code the Crusoe can understand. That allows the Crusoe chip to run the software, too. And, sometimes the translated version of the software runs faster than the original — even though the chip is smaller and uses less energy.

Since the feature of Crusoe that lets it do this alchemy is software, updating it is the equivalent of updating your hardware. Forget junking your machine every time a new model comes out. Just log on, go to the Transmeta Web site and download the newest version of the translator.

It doesn’t sound too sexy, but the potential is enormous. It could transform the entire range of digital devices, as well as make software and other devices interchangeable. Imagine a single computer that runs Windows, Mac, Sony and Linux software all at once.

To push the “visionary thing,” Transmeta recruited Linus Torvalds, the man behind the Linux software, to join the company’s engineering team. No wonder investment analyst Jonathan Joseph compared Transmeta to “a mammal in the age of dinosaurs.”

Potential isn’t always realized, however. Transmeta got great PR at the Crusoe launch, but there were fears that the buzz would turn into a hangover. Making semiconductors is an expensive business, and hardware companies have to design a chip into their system. Slowly, that is happening. Some big-name companies — AOL, Compaq, Gateway and Sony — have bought stakes in Transmeta.

A big step came last week, when Gateway announced that it will use a Transmeta microprocessor and the Linux OS in a new line of Internet appliances, devices that offer Net access, but aren’t PCs. This is the first time that a big PC manufacturer has embraced Transmeta. Some see this as the first serious threat to the Wintel duopoly that has dominated personal computing. (Once again, don’t forget the word “potential.”)

Microsoft isn’t quaking, but it should be worried. Transmeta’s chip goes a long way toward leveling the playing field by letting software makers write software for all systems and letting Crusoe do the translating. That means there is less incentive for computer makers to install Windows as their OS: Crusoe will ensure that there are just as many applications available for purchasers.

And the migration of platforms from PCs to handhelds means that Palm (for example) could emerge as a real competitor for Windows CE — with Crusoe doing the translating. If the chip uses less power, then manufacturers have more juice to run bigger screens, or they can shrink the whole box. No wonder then that after last week’s announcement by Gateway, several analysts pointed out that “Internet appliance” means non-Wintel system.

Other makers have recognized the importance of increasing chip efficiency. Earlier this year, Intel introduced SpeedStep, and AMD has PowerNow, both of which promise to lengthen battery life. Neither, however, matches Crusoe’s code-morphing capabilities.

Maybe Gates wasn’t paranoid after all.

Brad Glosserman (brad@japantimes.co.jp)