Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jim Stone – PSK Advisors
Jim Stone – PSK Advisors
I was wondering if you could give us some insight on roughly what percent of the corporate revenue is from 10G or now as you said the fiber channel 8G type products, i.e. the very high speed.
Chris Gardner
If we look at our product portfolio we sell a variety, we basically break it out into Ethernet products, Carrier class transport processing products and PHY products. The PHY products in particular sell into both Enterprise and Carrier applications. Its gets a little complex but if I were to look across our product lines I would guestimate that somewhere between 40% to 60% of our products sell into applications that are 10G and probably 50% or so sell below 10G primarily into 1G Ethernet applications.
Jim Stone – PSK Advisors
Can you give us some of your insights as to how you see that 10G market developing? I know Gardner put out a report saying 59% growth; they’re talking the whole 10G market obviously. I’m wondering what you folks see for the market itself.
Chris Gardner
I can’t quote you any specific numbers but certainly the transition from current generation speeds to higher speeds is a key hallmark of our strategy. Vitesse has always played at the higher generation or higher speeds. We’ve been doing 10G for now probably close to 20 years so we’re very well positioned there both in our physical layer devices for SONET and Ethernet, our PMD devices that is laser drivers and Transimpedance amplifiers for SONET and Ethernet as well as our transport processing product like Ethernet over SONET mappers etc.
That transition is a critical one that is going from Gigabit to 10. We also are helped by the transition that drives that which is the transition from 10/100 that is fast Ethernet to Gigabit Ethernet. The test is not a player at 10/100 speeds. We are a player only at Gigabit and above. As that very high volume market of fast Ethernet converts to Gigabit we generate business on our Enterprise products. As those products become more widely deployed in the network in laptops, in servers, etc. they require 10G pipes to interconnect them that drives our 10G business. Both of those transitions are good ones for Vitesse.
Jim Stone – PSK Advisors
Can you share with us what you’re finding from your customers about what their plans are on converting to 10G at this point is the economy slowing that or is there just other factors that you think will still keep that roughly same growth rate in.
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