Question-and-Answer Session
Operator
Thank you. (Operator instructions) We will take our first question from Timothy Arcuri from Citi.
Timothy Arcuri – Citigroup
Hi guys. Thanks a lot. First of all, Jean, it sounds there is a lot of variants around margins, there is a lot of stuff going on with the mix. Can you specifically give us some idea of what that variant is i.e., what is the higher margin products versus what is the lower margin product and kind of what that mix is shifting?
Jean Vernet
Yes, it’s a little bit difficult to be too granular on this. Last quarter, we pointed out that we had some margin differences with what we call our standard product versus our high technology product. And this change of – I mean this variability in gross margin is mainly due to that.
Mario Ruscev
Tim, just to give you an example. If you take a Harmony card, if you have Harmony card that does two touchdowns with a lot of theory, et cetera, this is usually a product which is high-end products with a good margin. When you have a product which competes more standard product with competition which is good enough, usually margin are not as good. Even in PH150, we have some PH150 with advanced theory that can do two touchdowns.
With LM [ph], we saw very good products when you have PH150 competing in a much more depressed market where there is not much differentiation of a marginal difference. So it’s very hard to say, in fact, really either this product or this product. You will do it much more by applications on how you go. This is really how the margin is viable. And we have seen in the last quarters that a customer in some case, for example, they had a lot of testers available, so the demand our efficiency is not as strong, so we some of our availability in some other case. Suddenly they want something different. That’s why it’s very difficult to predict that and we have a lot of volatility late in the last few quarters over that.
Timothy Arcuri – Citigroup
Okay. But I guess the point being made is the mix shift toward the higher-end Harmony cards, there should be some extra margin leverage there, correct?
Mario Ruscev
As our customer needs more and more efficiency, usually this is a better sign for us.
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