Question-and-Answer Session
Operator
(Operator Instructions)
We will take our first question from Vernon Essi with -- I apologize we’ll return to Vernon. We'll go next to Christian Schwab, Craig-Hallum Capital.
Christian Schwab - Craig-Hallum Capital
Great, nice quarter, guys. I know we just talked about Q4, but in Q1 of next year: we would expect typical seasonality there as well?
David Smith
We haven't given any guidance on Q1, but yes.
Christian Schwab - Craig-Hallum Capital
Perfect. And when we look at, after we have shed some revenue in particular, walked away from the low margin business in the PC space: would we expect a year-over-year growth in fiscal year '09 in the PC business?
Steve Bilodeau
PC business?
Christian Schwab - Craig-Hallum Capital
The PC I/O business?
David Smith
We haven't given any guidance for --.
Christian Schwab - Craig-Hallum Capital
I know you haven't. My question is: in 2009 would we expect that business to resume growth that would be logical, correct?
David Smith
Yes, that would be logical.
Christian Schwab - Craig-Hallum Capital
That would be logical?
Steve Bilodeau
Yes.
Christian Schwab - Craig-Hallum Capital
Perfect, and then as we look at gross margins from here, from the 52% range looking forward: how much more room do we have there for future increases?
Steve Bilodeau
Well, we have been on a steady increasing path for margins, and our margins are higher than what you are talking about there already and we are expecting to see and I think we guided, the guidance were giving for next quarter is flat in this quarter. We haven't given guidance for next year, but our goal is to continue to drive the margins higher, and we expect though some lift next year we’re just not stating what our objective is at this time.
David Smith
We do expect to be able drive margins higher we are just not ready to give specific guidance on the point yet.
Christian Schwab - Craig-Hallum Capital
Right. I guess I was looking at product gross margins, which is just my assumption minus the Intel payments on the 52% range. But: we would expect gross margins to modestly improve in 2009 on a year-over-year basis?
David Smith
Yes.
Christian Schwab - Craig-Hallum Capital
Okay, great. And then after the slight increase here in operating expenses: we would expect that to remain tightly controlled give or take throughout 2009? Is that fair?
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