Question-and-Answer Session
Operator
(Operator Instructions). Our first question is from Jeff Kvaal with Barclays Capital. Please go ahead with your question.
Jeff Kvaal - Barclays Capital
Yes. Thanks very much. Patrick, I was wondering if we could talk a little bit about the SMB market. I think at various points of the quarter, it sounded from other checks though SMB in some respects was doing better. Do you feel like that is a sustainable trend or what kind of trajectories will be on there?
Patrick Lo
Yes. Actually both from the end-market demand, what we jogging is POF standpoint as well as from the net shipment standpoint, we see a pretty encouraging trend. We see both our net and our switching and our business wireless products, they have slight uptake sequentially from Q1 to Q2. So, that's an encouraging sign, and we look forward to further uptake in Q3.
Jeff Kvaal - Barclays Capital
Okay, great. And then question maybe for either of you two actually. The deferred revenue was down a chunk financially, how should we think about that?
Christine Gorjanc
Deferred revenue is really down just based on delivery terms and that based on our customer title of transferring that. So that moves up and down in the same range every quarter. So it could go up or down, $3 million or $4 million every quarter.
Jeff Kvaal - Barclays Capital
Okay. Does it reflect that the service provider business, for example, might not be a strong view in the third quarter?
Patrick Lo
We expect that the service provider revenue was still maintained at the current absolute level, but since the retail for back-to-school and the SMB will continue to grow, then, as a percentage, we do expect the service provider revenue to be lower than in Q2.
Jeff Kvaal - Barclays Capital
Okay, great. And then lastly, could you please talk a little bit about the variables in the guidance range and what would be due to the high or low end of that range? Thanks.
Patrick Lo
Well, I mean, certainly, it really depends on Europe.
Jeff Kvaal - Barclays Capital
Okay.
Patrick Lo
All right. If Europe comes in at public?
Jeff Kvaal - Barclays Capital
I though you might say that Patrick, yeah.
Patrick Lo
? which is above flat, quarter-on-quarter, than we expect that will probably in the upper half. But if Europe continue to decline more than what we anticipated, then it will be the other way around. So I think the key is Europe, and unfortunately, there is still very little visibility in Europe. The good thing is, it looks like that the UK market which tanked first about six quarters ago is stabilizing, but then unfortunately continent of Europe is still in decline. And we think that they will still run the course for another quarter or two.
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