The company on Monday will introduce a new 300MHz Celeron processor, called the 300A, and a 333MHz Celeron, both of which have 128KB of integrated Level 2 cache. In addition, Intel will unveil a 450MHz Pentium II for high-end systems. Meanwhile, the company is also expected to debut the 300MHz mobile Pentium II. Despite performance improvements in the new Celeron, there are limitations to the platform. For example, the accompanying 440EX chip set supports a maximum of two DIMM (dual in-line memory module) sockets and only three PCI slots vs. four DIMMs and up to seven slots supported on Pentium II-based machines. Additionally, the 440EX chip set does not support error-correcting code memory. Although the new Celerons will offer greater performance through their 128KB of integrated cache, Pentium II chips at the same clock speeds will be faster due to their larger 512KB cache. Still, PC makers say they may have a tough time dodging the Celeron's poor reputation engendered by the first version of the chip, which did not include integrated cache. "It will be a challenge for Compaq and the industry to escape the effect of the original Celeron," said Michael Takemura, product manager for North American desktop marketing at Compaq. Compaq will begin support of the new Celeron in its Deskpro EP and EN lines next month At least one large corporate customer said the Celeron sounds interesting, but it doesn't beat faster Pentium II systems with predetermined pricing. "We have purchasing arrangements for newer Pentium II systems that don't make Celeron worthwhile," said Larry Shaw, PC co-ordinator at Nordstrom in Seattle. Intel's plan is to move quickly to the newer Celeron, phasing out the 266MHz PII as early as this quarter, sources said. Intel also plans to deliver a 366MHz Celeron in the first quarter of 1998. Systems based on the new Celerons will start at about $1,000 (£610) OEMs said. At the higher end, PC makers complain that the 450MHz Pentium II with 512KB of cache, due next week, will too closely resemble the 450MHz Pentium II Xeon with 512KB of cache, which is due by year's end. "We don't know how to sell it," said an official at a top five PC maker. "Everyone's in the same boat because the performance [of the two 512KB versions] is so similar." The problem may also be the steep price difference, sources said. The 450MHz Pentium II, which will be priced at $670 (£410) in 1,000-unit quantities, will drop to $580 (£354) by year's end, sources said. Its Xeon counterpart will cost $1,060 (£646) at its introduction. As a result, Intel may shelve plans to release the 512KB version of the 450MHz Xeon and stick to higher-end versions, which will have 1MB and 2MB of cache, according to sources. Those are due late this year or early next.