Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kathryn Huberty – Morgan Stanley.
Kathryn Huberty – Morgan Stanley
Given your comments that the environment didn’t weaken in the July quarter, is it fair to assume that the majority of the 15% sequential decline in product revenue was really just due to the purchase delays ahead of the new product launch, and if we combine better visibility going forward and the significant improvement in the new products, why wouldn’t we see sequential growth as we go into the next couple of quarters?
James P. Baum
I think as we look at the quarter, clearly we didn’t see the quarter worsening, but we also didn’t really see the environment getting a lot better. I think the comment about not worsening really was manifested in the fact that we didn’t see as many situations where we were surprised by people implementing budget cuts during the sales cycle. There may not have been as many sales cycles running, but generally when they were running, they were sales cycles that came to or will come to some kind of conclusion. As we rolled out the new product, we worked hard to make sure that we timed it appropriately in the market and we worked hard to have it not impact Q2 business to the extent that we could, although in general we did go to our customer base during the quarter and shared with them before the announcement of the product that we had new technology coming, so that we didn’t blindside our customers. As you know, we have very strong extensive relationship with our customers, and we wanted to make sure that they had lots of visibility. So I think that as we look at the decline in the quarter, I would not necessarily attribute a lot of it to deferment due to the product, although there are certainly a few cases where people wanted to test and experience the new product before they made a commitment. There were 2 or 3 instances of delays that were in the hands of the customer that were late-breaking issues in the quarter that were disappointments for us.
Kathryn Huberty – Morgan Stanley
How long will it take for either existing or new customers to get in and test the TwinFin products and really start to see meaningful number of new purchases? When should that inflection point occur?
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