Question-and-Answer Session
Operator
Thank you sir. (Operator Instructions) Your first question comes from Brian Freed – Morgan, Keegan & Company, Inc.
Brian Freed – Morgan, Keegan & Company, Inc.
Can you talk a little bit about media and drive? Obviously we’re the biggest component in the shortfall relative to your revenue expectations in the quarter. From a margin perspective, can you kind of give us a sense – is that a profitable business or is it really much more of a break-even business as we kind of think about the value of that revenue versus the more [inaudible] revenue out there?
John W. Gacek
Let’s do media first. Media is clearly sold as a commodity through multiple channels and we have opportunities to have really good business there, but if somebody at one of the media suppliers and one of the big system OEM’s decides that they want to drive revenue and not margin that pushes hard on the price. And we’re not going to chase that business if we’re not going to make money. So we have an internal threshold of what we’re trying to target in the media space. I can tell you it’s positive. There have been times when it hasn’t been positive actually. But it is positive today.
And we’re not going to chase that business down if the dynamics in the market are bad. So it’s just a trade-off and I don’t feel like it is – contributes a lot financially to chase it down. So we’re not going to do that. It burns up cash and doesn’t generate EBITDA.
Device is a little bit different. We have a LTO-4 drive that we’ve announced and launched and we think that there is more opportunity there in the channel as we deliver that product and put channel programs around it. So I think that is a place where we would like to see some growth. It does – it is a nice profitable business for us and that’s a place where we’re going to focus some effort.
Brian Freed – Morgan, Keegan & Company, Inc.
Secondly related to the EMC relationship can you give us any quantification from how the ramp’s going with the EMC? And secondly can you give us a little bit more granularity in terms of timing for reporting EMC royalty? Is it in the quarter is there any sort of lag?
John W. Gacek
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