That was the trap into which Transmeta fell, says Brookwood. The company had a huge initial public offering (IPO) at the tail end of the dot-com boom. It then spent the several hundred million dollars raised on developing mobile CPUs, which failed to deliver on their promise of super-fast and low-power. Transmeta's chips are not widely used and it .

Don't think you know better than your customers

PowerPC was created in the early 1990s by an alliance between Apple, IBM and Motorola Inc. PowerPC chips were based on the then heavily-hyped Reduced Instruction Set Computers (RISC) architecture, which sought to raise performance through efficient chip design, rather than cramming more, smaller transistors into a chip, as exemplified by x86's Complex Instruction Set Computers (CISC) approach.

At the time, PowerPC was arguably faster than x86. Backers thought that would be enough to win software and hardware makers over to the platform, said Enderle. In the end, independent software vendors and original equipment manufacturers responded to customers, who were buying x86 PCs because of Windows and their larger pool of software.

The situation is reversed today. It's not the phone makers or even consumers calling the shots, says In-Stat's Lao. It's