When Intel's Frank Spindler disclosed that the chip giant is fast tracking the production of a new ultra-low-power chip for notebooks, there was an interested eavesdropper nearby. Transmeta chief executive David Ditzel was attending the Microprocessor Forum this week when Spindler, vice president and general manager of Intel's Mobile and Handheld Division, said that a new ultra-low-power Speedstep-based mobile Pentium III chip was in the works and should ship next year. The chips, which consume less power than current mobile Pentium IIIs with Speedstep Technology, are being moved into production sooner than originally planned to counter Transmeta's low-power Crusoe processor, which began shipping in notebooks in Japan last month. As for the eavesdropper, Ditzel said he was glad to hear Intel is addressing the low-power segment, because it validates his company's approach to the market. With its low power consumption, Transmeta's low-power Crusoe processor and LongRun power-management software and Intel's forthcoming low-power Pentium III are designed to extend battery life for mini-notebooks to up to 12 hours. Intel officials concede that Transmeta did wonders for raising industry awareness of battery life. But, unlike Transmeta, Intel expects that the mini-notebook will account for only a small part of its overall mobile chip business, whereas more fully featured notebooks with larger screens, integrated drives, and faster processors will account for some 60 percent of sales. According to Ditzel, the difference between Crusoe and the forthcoming Intel chips will be about a quarter of a watt. Crusoe chips on average consume about .5 to .75 watt; the forthcoming Intel chips will consume about half a watt on average. (Currently, Intel is shipping a 600MHz mobile Pentium III with Speedstep that consumes about one watt of power when running at 500MHz in its Battery Optimised Mode.) Ditzel showed ZDNet News a Hitachi notebook with a 600MHz Crusoe TM5600 chip. The notebook, along with three similar models and a Crusoe-based Web Tablet, debuted in Japan on 27 September and will be officially announced later this month in the United States. European release dates have not been set. Ditzel demonstrated how the Hitachi model scaled in 100Mhz increments from 300Mhz to 600MHz, but spent most of its time running at 300MHz unless it was loading an application or playing a movie. According to Ditzel, the notebook yields a battery life of between 10 to 12 hours. Intel's first ultra-low-power Pentium III chip, due in the first half of next year, will be a 500MHz, which drops to 300MHz when on battery power. When running at 300MHz, the chip will consume about half a watt of power. Active power consumption for the chip will be closer to 1.5 watts, Intel officials said. The chip's core voltage will drop to 1 volt, compared to the 1.1 volt of the current 600MHz low-power mobile Pentium III with Speedstep. A 600MHz version of the ultra-low-power mobile Pentium III is planned for the second half of the year. Speedstep, which acts as a switch to drop clock speed and power consumption of a Pentium III running on battery power, is not dynamically variable like Crusoe, which can move through a number of clock-speed and power-consumption states based on demand from an application. Intel is also focusing on chipsets and other system components, including screens and batteries. At the Microprocessor Forum the company demonstrated a version of its 440MX mobile chip set with active power management. The chip set's average power consumption was shown to be about half a watt, making the entire processor and chip set package average less than one watt. Intel is also investigating ways to get more life out of lithium-ion batteries and to reduce the power consumption of notebook screens. The company may make investments in companies working in those areas -- however, it has not disclosed any such plans to date. Transmeta's approach to system-level power management was to integrate the memory controller, a major part of a chip set, into its Crusoe 5XXX line of chips. This works to save both power and cost. The first ultra-low-power mobile Pentium IIIs will be based on Intel's current 0.18-micron manufacturing process. They "require nothing special in terms of manufacturing," one company official said. See Chips Central for daily hardware news, including an interactive timeline of AMD and Intel's upcoming product launches. In baseball terms, Intel is in a slump. Product delays. Mounting competition. And a stock price stuck in the dugout. Is the all-star chip maker suddenly minor league? Jesse Berst will tell you what's troubling Intel and what it means for the company's future. Go to AnchorDesk UK for the news comment. Take me to the Mobile Technology Special To have your say online click on the TalkBack button and go to the ZDNet News forum. What do you think? Tell the Mailroom. And read what others have said.