Intel Monday announced a chipset aimed at lowering the cost of laptop computers using its Pentium and Celeron processors, the dominant chip company's latest response to threats from AMD and startup Transmeta. The 815EM supports SpeedStep, Intel's power-saving technology, a new I/O controller hub, dual Ultra ATA/100 hard drive controllers, a LAN connect interface and support for digital surround sound. It is based on Intel's advanced Hub Architecture. "This new mobile chipset provides richer, robust 2D and 3D graphics, providing for a more compelling mobile PC experience," an Intel spokesman said in a prepared statement. Support for SpeedStep is particularly important, industry observers said, in light of the appearance of new laptops containing Transmeta's Crusoe processor. Crusoe, unveiled earlier this year, claims to deliver performance comparable to an Intel mobile processor, but consuming only 0.5W to 1.5W of power. That, Transmeta claims, will mean much longer battery life for Crusoe-based laptops. "This new chipset reduces the cost in terms of silicon and board size, and it reduces power consumption as well," said Andrew Norwood, senior analyst with Gartner Dataquest. "I'm sure they'll be giving [the SpeedStep support] a lot of prominence, with Transmeta chips now appearing." Intel has suffered from persistent shortages of its top-of-the-line microprocessors and delays or cancellations of key chips. The company is, however, set to launch the new Pentium 4 processor which it promises will put things back on track. The chipmaker plans to launch the Pentium 4 next month, then push the chip's clock speed beyond 2GHz by the middle of 2001. However, Intel will have to get beyond its recent problems, which include manufacturing-related delays, a defective 820 chipset, the cancellation of its Timna low-cost processor, and the recall of the 1.13GHz Pentium III processor. Pentium 4 is supposed to give the platform more headroom for speed increases than the ageing Pentium III, but AMD's Athlon -- currently the fastest consumer PC processor -- is also built to scale to much faster speeds, according to analysts. "I'm sure AMD will come out with a similar part [to the Pentium 4] very quickly," said analyst Norwood. "They won't let them rest." Intel has also apparently been rethinking its relationship with Rambus, a US-based company that owns the rights to a next-generation memory technology called Rambus Direct RAM (RDRAM). Intel linked with Rambus in 1996 and intended to make newer chips such as Pentium 4 and Timna reliant on RDRAM. But Intel has had trouble manufacturing the chipsets that allow processors to work with Rambus memory, leading to delays. Intel also scrapped Timna earlier this month once it seemed there would be little market for a low-cost chip that required expensive Rambus memory. Last week Intel chief executive Craig Barrett told the Financial Times that depending on Rambus had been "a mistake". Intel seems to have finally woken up to the problems Rambus is causing, according to Dataquest's Norwood. "They are taking a more pragmatic approach now," he said. Pentium 4 will, initially at least, depend on Rambus memory. John G Spooner contributed to this report. See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta. Will Transmeta wipe out Intel and AMD? To have your say online click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.