Question-and-Answer Session
Operator
Thank you. (Operator Instructions). And we’ll take our first question from Daniel Amir with Lazard Capital Markets.
Daniel Amir - Lazard Capital Markets
Thanks a lot, thank you for taking my call. A couple of questions here, first of all on the Verizon situation, you are mentioning that it’s come back now to a normal I guess more normal shipments here. Help us to understand a bit as we compared the last year when the revenue base was a lot higher those FiOS subscribers continue to be pretty solid at Verizon. How should we see it coming back to potential the level of that, you had a Verizon in the first half of 2008? Or is that something that we should only really see once we come out of the recession?
Patrick Henry
Yeah, so hey, Daniel this is Patrick. Our peak Verizon shipment quarter was Q2 of last year. We actually shipped a lot more unit than actual demand supported during that quarter, and that’s part of because the inventory issue. The other thing is most of the product that we shipped during that time was our first generation MoCA, which had substantially higher ASPs, as we have consistently talked about. We see about 25% ASP erosion per year, so the same number of units would be substantially less dollars based on that. So we do see we're kind of more in a run-rate basis going into Q2, and the revenue that we'll do with Verizon although we don't break it out separately, reflects where that's going to be.
Now, Verizon subscriber growth grows to the more than 300,000 units per category, than there is some potential upside there, but the current run rate, that's reflected in what we're forecasting for Q2.
Daniel Amir - Lazard Capital Markets
So you basically feel that Verizon now is back to a more normal, in normal shipments in terms of your business with them.
Patrick Henry
Yes, so our direct customers are the OEMs, people like Motorola, Actiontec, Westell, folks like that, Tellabs. Our ordering patterns are more consistent with what we see in terms of end demand right now. We had a probably our toughest quarter in Q1, where inventory was tightened down even more than what we originally thought when the downturn first hit us, but now we're back into a kind of more normal ordering pattern.
Daniel Amir - Lazard Capital Markets
- To read the full transcript on Seeking Alpha, click here »
