Question-and-Answer Session
Operator: (Operator Instructions). Maynard Um from UBS, please go ahead with your question.
Maynard Um - UBS
Hi, thanks. Presumably, there is not a whole lot of visibility out there one year out. Just curious when you look at the numbers now, how conservative or aggressive do you think your guidance might be, because you are looking for fairly good handset unit growth in 2009, but implied a much weaker chipset?
Even taking into account the inventory correction, it feels like there might be a disconnect. Are you overly conservative here on the chipset side or how comfortable or how much visibility do you have to the handset side? Thanks.
Bill Keitel
Maynard, these estimates that we have given are our best estimates. We are not attempting to be conservative here. The inventory contraction will have a significant impact on MSM shipments. We expect that will be largely limited to the first two quarters of fiscal 2009.
In terms of fiscal 2010, I would add that under Paul's direction and his caps on our headcount and resource growth that we first took a careful look at 2010 and updated that outlook in line with the goal of targeting our R&D programs, so that we end up where we want to be two and three years from now, and not overly focus on an inventory contraction here for the first two quarters.
Operator
Glen Yeung from Citi, please go ahead with your question.
Peter Karazeris - Citi
Hi. So, this is Peter Karazeris for Glen Yeung. Your 2009 handset ASP assumption of 195, down 10.5, can you give us a sense of the run rate of how that would come through the year? In other words, is it a relatively steep decline in the beginning or does that decline somewhat steadily?
Really in the same vein, as we began this year, you had guided to 199 and had upside to the year. Can you give us some of the puts and takes around that ASP number, what would be upside and what would be downside? Thanks.
Bill Keitel
Hey, Peter. So, we think we are coming off of fiscal Q4 at about a $216 ASP, and our estimate for the first fiscal quarter is $205. I will share with you that the $216 to the $205, we estimate approximately $9 of that is due to the stronger dollar. I would add I think we have pretty good visibility on that, given that the exchange rates with our licensees was set at the end of September.
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