Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question this afternoon from Mr. Manuel Recarey with Kaufman Brothers.
Manuel Recarey - Kaufman Brothers
You put -- H3C was certainly -- posted a good quarter and I understand sequentially the seasonality in the first quarter. Can you talk a little bit about your outlook for the relationship with Huawei with what you can? And when does the non-compete expire?
Edgar Masri
So your question, Manny, is about our relationship with Huawei and the non-compete. Huawei is and has continued to be a strong partner of 3Com, specifically H3C, and we are looking to maintain this relationship. The non-compete expires in September ’08, which is about six or so months from now, to answer your question.
Manuel Recarey - Kaufman Brothers
Okay, so you are still discussing and still talking with them and is kind of the status quo for now.
Edgar Masri
Right. Just as a reference, there are certain products that were not part of the original joint venture where we today compete in the marketplace with Huawei and we feel that we’ve been doing well and will continue to do well.
We are keen on maintaining our relationship, specifically on the switching and mid-range routing products, which are covered by the non-compete.
Manuel Recarey - Kaufman Brothers
Okay. Can you give any outlook for what your plans are for Tipping Point? This summer you had spoken about spinning that off and then -- and with the whole Bain acquisition, that’s -- you know, was put into question so just kind of curious what update you have with that.
Edgar Masri
On Tipping Point, if you’ll recall about nine months or so ago, we announced our desire to spin off Tipping Point and when we went into the merger agreement discussion with Bain, we decided to put this on hold until after we closed the merger.
We continue to operate Tipping Point as an autonomous entity and track them as a segment, as you see. And we are keeping our options open about how to maximize this business value as part of 3Com.
Manuel Recarey - Kaufman Brothers
Okay, and then one last question -- can you talk about the channel’s reaction to the acquisition? Obviously the economic environment is much more challenging than it was when the acquisition was first announced and so over these past several months, how has the channel reacted to this? Is there anything that you have to do to try to reinvigorate it?
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