Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Richard Kugele – Needham & Co.
Richard Kugele – Needham & Co
What are your underlying PC growth assumptions for the next fiscal year that underlies your guidance?
Woodson Hobbs
We don't give that and I'd prefer not to break our guidance down into components in part because we wrote subject and we would be reporting at the product component level. So we normally do our reporting license subscription revenue and services revenue. At a high level, general sub strait will fall in the license and services piece whereas new businesses will tend to fall more into the subscriptions piece.
Richard Kugele – Needham & Co
What I was trying to get at is your comfort level and visibility into this new number. If you were assuming something like 10% PC growth, your people might have part of you, if you were assuming 5%, people would have another. How conservative is the 101.5?
Woodson Hobbs
I think if you backed it out you'd probably be talking about growth in the range of half the prior expectations so the prior growth expectation would be about 30% for portables and maybe we'd get a 15% for portables is the implied assumption in this number.
Richard Kugele – Needham & Co
You talked in the press release about how the difference between the growth in the net book side versus the more traditional product. Can you talk about the ASP difference there or the gross margin difference as those two areas have fairly different growth rates right now?
Woodson Hobbs
Pricing in the net book area hasn't stabilized yet and I would never give that level of granularity to ASP's. We don't give detailed granularity of ASP's anyway. In rough terms, the net book is more like the desk top business, like the portable business. That's probably the highest level picture I can give you.
Richard Kugele – Needham & Co
In terms of this tier one OEM announcement on the FailSafe side, is this incorporated into the 101.5 as well? Are there additional OEM announcements that are built into this guidance or at some point do we find an announcement leads to an upper revision?
Woodson Hobbs
Understand the timing. We have design wins long before we had signed contracts which in turn is well before that product hits the streets. So these design wins were things that we had in our pocket six and nine months ago and the contracts are now executed and therefore we've made announcements. But you will note that particularly in this last one, but even in the Samsung case, those were not joint announcements for customers. They were in fact announcements that we felt we needed to make because of the significance of the contracts.
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