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Japan cool to low-cost Intel chip

Though it hasn't yet reached the market, the Celeron will probably have a chilly reception in Japan as well as the United States.

Though it hasn't yet reached the market, Intel's first chip to specifically target low-cost PCs, the Celeron, will probably meet with a cool welcome in Japan, mirroring its advance reception in the United States.

Celeron is unlikely to gain more than ten percent market share, Intel Japan chairman Ikuo Nishioka recently told a Tokyo seminar, business daily Nihon Keizai Shimbun reported today.

The admission is surprising given that Intel has pinned its hopes for addressing not only low-cost PCs but also advanced TV set-top boxes on the forthcoming chip, due April 15.

Intel designed the Celeron in belated recognition of the sub-$1,000 PC market that exploded in 1997. In Japan, however, demand for inexpensive machines hasn't reached anything like the 40 percent share these systems command in the United States. Even consumers prefer high-end PCs, Nihon Keizai Shimbun reported.

Also unlike the United States, vendors are complaining that the Celeron name squanders the brand recognition of Intel's Pentium, Pentium MMX, and Pentium II chips, found in as much as 90 percent of all PCs. In a departure from past practices, Intel has said it will begin to differently brand and target its chip products at different segments of the PC market.

In the United States, only Sony and NEC-Packard Bell are expected to introduce Celeron-based PCs upon the chip's April launch, according to various sources. "There is absolutely zero reception for the chip among vendors," Ashok Kumar, semiconductor analyst with Piper Jaffray, previously told CNET's NEWS.COM.

Yesterday, Intel revealed to CNET's NEWS.COM it will attack the market for next-generation TV set-top boxes with its Celeron line. These low cost-devices will provide Web access and e-commerce capabilities as well as cable access to a market far larger than the PC universe. But Intel lost the first round in the war for this new market, as earlier this week General Instrument said it would use a MIPS processor in the 15 million set-top boxes it has contracted to supply 12 of the nation's largest cable companies.

Essentially a 266-MHz Pentium II without secondary "cache" memory, Celeron has been criticized because removing the cache slows down performance. Cache is secondary memory is used to bridge the gap between speed of the processor and the speed at which main memory can feed it with data.

A follow-up Celeron chip that will appear this fall, code-named Mendocino, will again incorporate cache memory.

In addition, the chipset, motherboard, and other parts required for the Pentium II put the Celeron design at a price higher than a more standard solution based around high-end Pentium MMX-style chips.

Intel is an investor in CNET: The Computer Network.