Welcome to the Qualcomm second quarter fiscal 2008 conference call. (Operator Instructions) I would now like to turn the call over to John Gilbert, Vice President of Investor and Industry Analyst Relations.

Today’s call will include prepared remarks by Dr. Paul Jacobs, Steve Altman, Dr. Sanja Jha, and Bill Keitel. In addition, Don Rosenberg and Len Lauer will join the question and answer session. An N&F presentation and audio broadcast accompanies this call and you can access it by visiting www.qualcomm.com. During this conference call we will be using non-GAAP financial measures as defined by the SEC and Regulation G. You can find the required reconciliations to GAAP on our web site. I would also direct you to our 10-Q and earnings release which were filed and furnished respectively with the SEC today and are available on our web site. We may make forward-looking statements relating to our expectations and future events that may differ materially from Qualcomm’s actual results. Please review our SEC filings for a detailed presentation of each of our businesses and associated risks and other important factors that may cause our actual results to differ from these forward-looking statements. I would also like to remind our listeners to mark their calendars for Qualcomm’s Annual Analyst Day, which takes place in New York City on November 13th of this year. And now it is my pleasure to introduce Qualcomm’s CEO, Dr. Paul Jacobs.

Let me begin by highlighting our second quarter financial results. Another record quarter of shipments for both CDMA-based chipsets and devices enabled us again to deliver excellent results to our stockholders. Revenues were up 17% year-over-year and pro forma earnings per share were up 8% from the year ago quarter, but it’s important to remember that this year’s results do not include Nokia royalties. I would like to thank our employees and partners for continuing to execute and deliver the most innovative and highest quality products and solutions to consumers worldwide. There has been recent concern surrounding the U.S. economy. While we can’t predict the future, Qualcomm’s businesses are geographically diversified and a significant portion of our revenues are from international customers. In other words, much of our growth is linked to global markets and I am pleased to report that based on the current business outlook, we are raising fiscal 2008 revenue and earnings per share guidance. We remain committed to returning capital to our stockholders through our cash dividend and stock-repurchase programs. Our Board of Directors recently approved a 14% increase in our quarterly cash dividend and a new $2 billion stock-repurchase program. We have now returned approximately $8.8 billion dollars of capital to our stockholders since fiscal 2003. There are many exciting developments in our business. I would now like to highlight some of the key achievements. QCT delivered their 11th consecutive quarterly record for MSM volumes as CDMA-based chip shipments were up 39% year-over-year and we experienced strong year-over-year growth in both WCDMA and CDMA2000 chipsets. QCT achieved significant progress this past quarter on key growth initiatives and continues to execute at a very high level. And Sanjay will provide you more details later in the call. In our QWI segment the BREW platform continues to…

We had another strong quarter as 3G device sales continued to grow rapidly and consumers worldwide are taking advantage of the innovative and compelling products, services, and applications enable by CDMA-based technologies. Subscribers continue to benefit from a vibrant and competitive market providing a broad range of devices from the very low end to fully-featured smartphones. For example, the GSMA recently noted over 635 HSPA devices had been launched worldwide by 110 suppliers. This represents 150% year-over-year growth in devices available to consumers and a 75% annual increase in the number of participating device manufacturers. As the industry transitions around the world to 3G systems, the range of WCDMA and CDMA2000 products and prices continue to broaden, including further reductions in pricing at the low end. In fact, according to reports from our licensees, the lowest priced WCDMA handset sold in quantities of more than 50,000 in the December quarter was less than $80, breaking the $100 price barrier for the first time for volume sales. At the same time 10% of the lowest end CDMA2000 handsets remain well under $30. As CDMA prices continue their decline we expect they will continue to displace the lower end sales of GSM handsets and we expect an increasing percentage of OEM R&D spending will continue to move away from GSM handsets and towards developing new CDMA handsets and functionality. As we had mentioned before, as the wireless industry and our success in it continues to expand, we remain faced with a number of legal and regulatory challenges brought by a small number of companies intending to disrupt our business and further their own business interests. I would now like to update you on some recent developments in our various legal matters. In our continuing litigation with Broadcom, we filed our appeal on…

The second fiscal quarter of 2008 was very successful for QCT and I will share some highlights. We shipped approximately 85 million MSM chipsets, which represents our 11th consecutive record quarter of shipments. This is 8% higher than the previous quarter and represents a growth of 39% over the same quarter last year. QCT generated revenue of $1.62 billion in the second fiscal quarter of 2008. This was our 8th consecutive quarter of record revenue and represents growth of 29% year-over-year. We can attribute much of this shipment growth to the increased demand for our entry-level products, which are destined for margin markets. Over the past quarter we have experienced approximately 60% growth in the delivery of our single chip platform that is targeted for this segment. In the mature 3G market, demand for high-speed mobile broadband has continued to drive growth in shipment for both our EV-DO and HSDPA data card chipsets. One of the primary trends driving this growth is the availability of flat-rate data plans from more 3G operators as greater numbers of users begin to rely on cellular data capabilities to stay connected. We are also experiencing healthy UMTS demands. While quarter-over-quarter growth was reasonably flat, our overall shipment continues to grow at the rate of more than 2 ½ times year-over-year. RFPs held up better than our previous guidance of a 9% decline, coming in at approximately 4% decline due to stronger demand in our enhanced multimedia tier. This trend is expected to enable a consistent weighted ASP entering fiscal third quarter. Depending on the mix of the margin and mature market shipment, we expect a moderate decline in weighted ASP in the fourth quarter. Our operating profit margin of 26%, in light of our continued investment to improve our leading technology position relative to…

I will begin with a few matters that are important to our results and our forward guidance. First, we resolved our royalty payment dispute with Sony Ericsson, covering all current and future periods and consistent with our prior guidance. Second, we continue to exclude our estimate of royalties we believe Nokia is required to pay us. Third, we are raising our estimates for fiscal 2008 revenue and earnings. We expect operating earnings to grow at a greater rate than earnings per share due to prevailing lower interest rates for cash and marketable securities investments. Turning now to our second fiscal quarter results. Year-over-year revenues increased 17%, operating income increased 9% and pro forma earnings per share increased 8%. QCT’s second quarter revenues increased 29% year-over-year to more than $1.6 billion. We shipped 85 million MSM units for a 39% increase year-over-year. QCT’s operating margin was a healthy 26%. QTL earned record revenues of $795 million this quarter and we estimate approximately 112 million new CDMA devices were shipped with an average selling price of approximately $222 per unit. QTL’s operating margin increased to 86%. Operating cash flow was approximately $950 million. Pro forma free cash flow was $775 million or 30% of revenues. During the quarter we returned approximately $1.2 billion of capital to our shareholders, including $455 million of cash dividends and $769 million to repurchase more than 20 million shares of our common stock. Cash and marketable securities now total $10.6 billion with $6.3 billion offshore and $4.3 billion domestic. Our pro forma estimated tax rate for fiscal 2008 is now 20% compared to our prior estimate of 21%, reflecting our estimate of additional foreign earnings taxed at a lower rate for the fiscal year. Turning to our guidance. We are raising our estimates for fiscal 2008 revenues…

Operator, we are now ready for questions.

(Operator Instructions) Our first question comes from James Faucette from Pacific Crest.

Thank you very much. Sanjay, I guess my questions primarily are to you. It sounds like while the chipset mix was a little better than you had expected in the March quarter, do you expect it be similar then for the June quarter and then decline a bit in the December quarter. I’m wondering how we should think about what the puts and takes are that are driving ASPs right now and how much variance would this be potentially in that ASP. And then my second question—I guess, part of that, I’m just wondering when we should start to think about timing of contributions from incremental products like GLO B, Snapdragon, and QST? Thank you very much.

Hi, this is Sanjay Jha. I think, as you say, this quarter we saw increase in both low end and emerging market chipsets demand but also we saw [inaudible]—not completely [inaudible]—our ASP was down 4%--but slightly higher than expected increase in our higher-tiered products and we expect a similar mix—similar factors will prevail in the June quarter. In the September quarter I think that a couple of things may occur. One of them is anticipated greater demand for low-end wide-band CDMA chips. Part of the reason why we have invested heavily in the low end, ever since 6246 with integrated RFC solution as well as our QSC 6240 is to drive faster migration from GSM to CDMA. And we anticipate that that will occur but nonetheless that will have some impact on our overall ASP. In terms of GLO B, we will see first devices launching in June time frame but we expect the majority of the volume shipment probably has minimal impact in this fiscal year but most of the financial implication of GLO B shipment actually comes in fiscal 2009 because we will only have one quarter of shipments, a few models, in this year.

And I guess just a follow up on that then, Sanjay, is that when we look at fiscal year 2009, I mean, is there something we should be thinking about in like 5 million-7 million units a quarter, or could it be more substantial than that? For GLO B.

As you know, five laptop manufacturers have adopted it and most of them are thinking about using GLO B initially for their enterprise devices. We, of course, are working diligently with them to ensure that we can deliver consumer-grade laptops with GLO B embedded in them, also. So at this point, I don’t think we have clarity as to exactly what the shipment there will be. But the traction has been very good so far.

Mike Walkley from Piper Jaffray, please go ahead with your question. Mike Walkley – Piper Jaffray: Thanks. A question for Bill, just on the guidance. I know there are a lot of moving parts here. Could you maybe walk us through the EPS change from Q2 to Q3 and how we should think about things like taxes, interesting Santa Ana-type charges?

Sure, Mike. Q2 to Q3—I would look at it this way; I’ll give it to the mid-point of our $0.50-$0.52 guidance for Q3. Mid-point obviously $0.51. So that would be a $0.03 decline from our Q2 actuals. About $0.02 of that would be in the licensing business as we expect a slightly lower volume of units to have shipped in the March quarter as compared to the December quarter. The other penny is split between expected increase in operating expenses and then also as we lowered the tax rate expectation for the full year—we lowered it in the second fiscal quarter—there was a bit of a Q1 impact that rolled into Q2. It was about ½ penny. Interestingly that ½ penny would not have rounded the March results down to $0.53. It stood it’s ground at $0.54. But nonetheless, that’s a ½ penny you won’t see follow into Q3. So ½ penny of tax, ½ penny of operating expenses, and about $0.02 of QTL. You know, Mike, why don’t I just give you a similar walk on how we’re looking for the—the current outlook for the fiscal year 2008 as compared to our prior estimates. Previously the mid-point estimate was about $2.04 a share and our current mid-point is $2.07. There’s about a $0.05 pick up on the licensing business from the stronger ASPs that we now see. There’s about an $0.08 pick up in the chipset business from the greater MSM volume and a bit higher average pricing through the year. And then there’s about a $0.02 pick up in the tax rate for the full year. And the operating expenses that I mentioned: the increased R&D for the chip business and the increased expenses for what we think is a pretty strong portfolio of new applications for patent—about a $0.06 decrease from that. That comes down to the operating income line. Below operating income, reduced our forecast for the full year about $0.06, again to this lower environment for interest rates. So that maps to that $0.02-$0.04 guidance for the full year. Mike Walkley – Piper Jaffray: Okay, thanks, Bill, that was very helpful in building our models. I’ve got to ask just one follow up question. I saw you lowered you WCDMA forecast slightly and there’s some worry of some inventory or slow down in Western Europe. Can you guys maybe discuss on any areas you’re seeing inventory build more than others? I know you say your inventories are kind of stable at the higher end of your range but are there any regions where you’re seeing any inventory build?

We did decrease WCDMA Europe just modestly—3 million units for the full year. From a channel inventory perspective, our best information is that there is an up tick in the WCDMA channel in inventory. CDMA2000 we think is going pretty much as our expectations. Again, it’s that higher end of the channel—of the average—that we’ve seen over the past few years. But it’s come in at that higher average for the last year or more. We’re being consistent with what we’ve done in the past. We’re assuming that that channel will decrease in the weeks over the remaining quarters of fiscal 2008. But we’ll see how that goes. We’ve put a lot of attention onto this forecast, given concerns from others and ourselves—is there an economic slow down impact? We carefully considered that and I think we’re being appropriately cautious with our forward guidance, but nonetheless, we feel pretty good about the guidance we’re giving here today. I would just remind people, we consistently build a reduction and replacement rate into our forward forecast and we ended 2007 we think the replacement rate-the total WCDMA—was around 46%. And you probably recall we previously guided 2008, we thought it would come in around 43%. So, we’ve already baked in a reduction, a replacement rate, which is logically, to the extent there is an impact, you would see it. The other area that I think likely to see it is in prepaid. But for Qualcomm CMA technologies, we’re not as exposed to prepay as some of the Fuji technologies are and then where we are being successful, CMA into prepay, it’s economies I think people are pretty optimistic on. So, all in all, we’re being cautious, we’re being careful, but all in all I think we’ve got a good plan ahead of us.

Tim Long from Banc of America, please go ahead with your question. Tim Long – Banc of America Securities: Thank you. Bill, probably another one for you. Could you talk a little bit about the royalty rate and kind of any up ticks in the quarter from a straight calculated basis? It looked like it ticked down again for the second or third quarter in a row. I’m just curious how Sony Ericsson plays into that and with Sony Ericsson resolve, just straight calculation with that mean we’re going to see an up tick in the calculated royalty rate for June or whether any other mix a factor? Thank you.

Sure, Tim. We continue to see a lot of factors that come into the royalty rates based on the information that we put out. You know, not the least of which is that Nokia is not reporting royalties to us today. So I think that’s a not small factor. As well as quarter-over-quarter we get ups and downs based on [inaudible] and a poll of our licensees, that drives a little area of [inaudiblity] into it. To give a little color on the Sony Ericsson, we previously said that we thought Sony Ericsson impact on our royalty rates, had they been paying at the rate we thought they should be paying, would have been in the range of between 5 and 25 basis points. And based on our settlement looking forward that prior guidance is still good. So it’s that kin of impact specific to Sony Ericsson. Tim Long – Banc of America Securities: Okay. So just to be clear—that would be that we would see that in the March quarter calculated above the December quarter. Is that when we would see the 5% to 25%?

Right. Of course, that depends on the relative volumes and ASPs that Sony Ericsson is shipping relative to other licensees.

Tim Luke from Lehman Brothers, please go ahead with your question. Tim Luke – Lehman Brothers: Thanks so much. I was wondering, could you just clarify, regionally, in tweaking the WCDMA global number from 284 to 280, where was the difference there? I think you said it was somewhat seasonably slower—was it Western Europe? Could you give any color there? I was also wondering, it looked like your R&D was up 9%, sequentially higher than what you had guided. What were some of the factors that contributed to that? And then it looked like your inventory on hand was also up a little bit; if you have any color on how you would expect that to trend going forward.

Okay, Tim. On the WCDMA 4 million unit adjustment on our forward guidance for the year, that was 3 million for Western Europe—WCDMA. Predominantly Western Europe. I think we also saw a little softness being reported in the recent quarter here. On the R&D, we’re continuing to grow our resources. We have been expecting a steady increase in our R&D expenses and thus far I think we’re quite pleased with the programs we’ve got ahead of us and quite a wide range of products and platforms that we’re going after there. So, actually I think R&D year-to-date is performing pretty closely to our original plan. And then on the inventory, we are increasing inventory in the QCT business. We’re moving towards a model where we hold more width product at our FAB partners, which we expect is going to improve our delivery performance to our customers, and overall reduce the total cost between us and our FAB partners. Tim Luke – Lehman Brothers: With respect to that, interesting comment, it went from 160 million down to 80. Should we be thinking that’s going to be for the lower from that, in the 60 or 70 range going forward? Or any color there would be very helpful. And then with the ASPs, which seem to go up sharply in terms of the guidance from 2 and 3 to 217. How much of that is currency and how much is the impact. And I would love to say, Steve, with the litigation process in Delaware, is that something that you would expect to begin in calendar 2008?

ASP is—it’s less so currency because I think you’re aware that each licensee’s rate resets at each quarter end. So less so currency. More so I think that the increase in demand for more functionality in the devices. Steve.

Don you can elaborate. Don J. Rosenberg – Executive Vice President: Tim, this is Don Rosenberg. We can’t predict whether Phase Two will begin in 2008. As things are scheduled now Phase One hearing is supposed to take place in July. There’s a lot of discovery and back and—some motions going back and forth. If that were to occur in July, the likelihood of [inaudible] deciding issues of Phase One, reasonably soon after that—I think probably by the fall are probably high. So, yeah, Phase Two could begin in 2008, certainly. But at this point, I think we’re just focusing on the start of Phase One at the end of July.

Matthew Hoffman from Cowan and Company, please go ahead with your question. Matthew Hoffman – Cowan and Company: I have a question for Bill. You made a comment about expecting to see inventory reduced as the year goes on. Is that in anticipation of more conservative behavior by the OEM and a softer macro environment or do you think it’s a result of OEM’s carrying less inventory and a more settled legal environment?

It’s really based, Matt, on others--going back a little bit more than a year, we know 15 to 20 weeks was the true band and inventory we saw average more in the middle of that band. And then in the last year or so we’ve seen it up tick to consistently be closer to the high end of the band. So I’m hesitant—we’re hesitant to assume that that’s going to be a fact of life going forward and we don’t want to be surprised by that channel decreasing. You know, every OEM—everybody in the channel wants to hold less inventory so I expect that’s just a natural drop. And the question is, is the greater diversity and greater range of product that is available to consumers, is that going to—it obviously puts pressure to hold more in the channel and the question is, are we going to be long here and is there going to be an up tick here because the channel will continue at the higher end. Matthew Hoffman – Cowan and Company: Okay. And second question for you here on linearity. Monthly linearity in the calendar first quarter. Did you see any, in terms of the demand from the OEMs, January, February, March and then as we spin into April, do things look like they’re keeping pace or have you seen some change there? Thanks.

Matt, this is Sanjay. In the first quarter, you recall that we had a little bit of shortage of some components and there’s generally some level of double ordering that goes on as a result of that. But other than that, as I look forward to our demand profile, I see no significant difference in terms of the forward looking demand right now. So, as you saw, we guided to 85 million to 88 million chipsets so we see a slight up tick in our demand for this quarter.

Mark Mckechnie from Am Tech, please go ahead with your question. Mark Mckechnie – American Technology Research: Great. Thank you. Appreciate it. Congrats on a solid quarter. Probably these are for Sanjay. Again, on the 85 to 88 million units, it looks like a pretty good number. I think you hit on the linearity. Can you give us a sense—maybe you can tell us on the mix between cdmaOnes and wide band CDMA going forward. Is there maybe even when a cut over might be, when you equal with units on both?

Mark, we are seeing a pretty good up tick in demand from emerging market places with CDMA2000. And that strength continues to next quarter. We’re seeing pretty good demand for [inaudible] and wide band CDMA, our expectation is quarter-over-quarter in wide band CDMA shipment. I think, though, as I mentioned, that we are now beginning to see within that wide band CDMA segment, little break in growth in the low end of wide band CDMA. We, of course, have been leaders in the low end because we want to cause migration from GSM to wide band CDMA so we see that as a positive, but nonetheless it does have an impact on our ASP. We see the 7000 series increasing in volume. We’re pretty happy about that because that’s the first time that we are able to address the application processor market since we don’t have a stand alone application processor. So 7000 enables us to capture higher ASP in the handset. The balance of all of this in third quarter is that we see roughly flat ASP but our guidance right now for fourth quarter is that we would see sequential market decline in fourth quarter relative to third quarter in ASP.

Maynard Um from UBS, please go ahead with your question.

Thanks. In terms of handset chips units relative to the industry handset chip, it looks like your strength there it seems like the market share gains are high levels of inventory. Is that the right way to think about it and can you help us distinguish between the two? And then secondly for Bill, on shore versus off shore cash, can you just give a sense of that and given the lower interest rate environment, what you intend to do with your cash, given the strong cash flow and your balance there? Thanks.

In terms of market share gain or inventory increase, I think that if you look at GSM shipment declining and more CDMA shipment then I think that that increases our total available marketplace. And within that I think that in wide band CDMA we have increased our market share over the last couple of quarters. So I think that there’s certainly an increase of our market within the whole wireless semiconductor space. In terms of whether the inventory has gone up, our view, as Bill has talked in some detail, is that inventory has been at the high end and while there is a slight in inventory in wide band CDMA, we don’t see either the CDMA or wide band CDMA in inventory as being abnormal right now.

Maynard, on the cash, we’re at a little over $10 billion total cash. Approximately $6 billion of that is off shore, $4 million on shore. So, up until last quarter it was—we’ve been, for some period of time here going back—the majority of our cash was on shore, less so off shore. Now we’ve swung that. And really because of the significant repurchases that we’ve implemented over the last year. In terms of the lower interest rate environment, I mean, that factors into our equation for when and to what degree we make stock repurchases—that’s specific to the domestic cash. On the off shore cash we’re continuing to work to look for investment opportunities and get that back into the business.

Brian Modoff with Deutsche Bank, please go ahead with your question. Brian Modoff – Deutsche Bank Securities: Couple of questions. Sanjay, can you talk about the competitive environment. We’ve seen Broadcom back off on their view of when they would get their market share, not really giving a time frame anymore. But then we also had Infinion this morning talking about gaining some design wins with the Korean vendors. Can you talk about what you’re seeing out there competitively and when we might expect to see some new advance out of Qualcomm on the process side? Thanks.

Brian, I think, clearly, there was a significant event in the landscape for the consolidation of the wireless business of XP Micro and XP. There will be consolidation and we see it as the first of many such moves potentially. If I look at my competitors, I think at the moment TMP and [inaudible] and Freescale and of course ST and XP, would be some of the main competitors. And of course, PI, working with Nokia and EMP, are some of the main competitors. I would say that [inaudible] is performing well in the marketplace today with their solution but I think as we migrate to HSPA+ and 65 nm integrated solutions, as well as migrate our roadmap to 45 nm starting June this year, we will do no more 65 nm tape out. Virtually every single thing that we tape out, except second sourcing and so on and so forth, will be in 45 nm. We’re already heavily engaged in 20 and 32 and 28 nm development. I think that we have an opportunity to continue to keep our leadership there. But it is, for some period of time, likely to be a very, very competitive marketplace in the wireless semiconductor space. And that I think will force some consolidation in the next two years.

Ehud Gelblum from JP Morgan, please go ahead with your question. Ehud Gelblum – JP Morgan: Hi, thank you very much. You used to give out a number that was a percent of your royalty income that was of 3GS. I wonder if you could give us a sense as to what that may look like, even if it’s relatively speaking vis-à-vis the prior quarter? And then if you could—Bill, you mentioned the foreign exchange was not—didn’t have much of an impact on QTL ASPs. I’m wondering if you could quantify did it have any impact at all so we can just kind of take that out and look at that. Then on chip ASP, Sanjay, you went into the quarter thinking it would be down 9% but it ended up being down barely 3%. If you can kind of elaborate on the types of the mix—I assume you’re selling more—the 7000 are selling more than you expected, and if so how can that really change things going forward. I mean should we be looking at ASPs—I know you give guidance at the end of the year and I’m coming back down again, but can we look at the 7000s perhaps even getting bigger in fiscal 2009?

Bill Keitel. On the Third Generation versus the CDMA2G, we stopped giving that simply because it’s all 3G today. The amount of the old cdmaOne chips anymore is just basically non-existent. On the F-Ex side, there is a composite F-Ex benefit. I think it’s less so relevant in comparison to the demand for more feature capable devices. F-Ex gets somewhat muted to us because the rate our licensee pays gets reset every quarter, so that somewhat keeps down from being too large of a benefit for us. Sanjay.

I think that there is—I won’t say exactly because I don’t remember the number, but something like 7X difference in RASP between the—the ratio between the lowest end chipset enabling some handset in India and the 7000 series chip enabling smartphone in mature market places. My expectation going forward is that QSE6010, which is driving growth of CDMA in India, Southeast Asia, will continue to be pretty strong. The demand there will continue to be pretty strong. And then, as I said earlier, we will also see the single chip UMTS solution, the QSC6240, now beginning to shift so that that will impact our mix. At the same time, of course, offsetting that is that 7000 series enhancement media tier devices are also strengthening, have higher volume shipment, with HSDPA, HSUPA, and DO Vision A devices giving higher SP. The mix, therefore, we see, at least fourth quarter, depending on what happens in some of the mature market places, the mix, I think, could be fresh, that we could see a modest decline in RSP in the fourth quarter.

I want to come back. I think when you mentioned the world P rate breakout between 3G, sorry, I misunderstood. I was interpreting the old 2GCMA from 3GCMA from 2000 and I think you were referring to the WCMA versus CDMA2000. We stopped breaking that out simply because we’re seeing more and more multi-mode. And so it’s getting to be more difficult to decide is it a CDMA2000 or is it a WCDMA device. As well as we’ve got these devices selling into the 2G market. So we didn’t think we could that meaningfully pinpoint that number going forward.

And your final question comes from the line of Tal Liani from Merrill Lynch. Please go ahead with your question. Tal Liani – Merrill Lynch: Thank you very much. I have two questions. First one is what are the drivers for the changes in ASP? You first predicted the year to be 203 and now you’re changing it to 217, so is it geographical mix, is it high end versus low end handsets? What’s kind of driving the change in your estimate? The second question related to it is, your guidance—you’re giving implied guidance for fourth quarter because basically full year minus the third quarter gives you the fourth quarter. And I’m very surprised to see that EPS goes down from let’s say $0.52 to $0.49 in the fourth quarter. Because this is the fifth time we don’t have Nokia, on both sides, and we should see acceleration--kind of conceptual acceleration of the growth rate and acceleration of profitability growth rate just because of that and we’re seeing deceleration when it comes to year-over-year numbers. Also, as you go through the year, there is kind of seasonality helping you to improve the numbers and profitability, so I’m wondering why are you so conservative with the implied fourth quarter EPS estimates? Thanks.

Hey, Tal, it’s Bill. I’ll give it a shot here. In terms of first one, change on the ASP drivers, regional mix is a significant element of that because the delta in ASP from one region to the other is quite significant. Thus far, our regional estimates have been—we haven’t seen a great deviation in what we’re expecting for the full year as to where we started at the outset of the year. So, it can be a big driver but it’s not a significant element in this changed ASP forecast we’re giving you now. It really goes more to that we think we’re seeing a higher, greater demand for more feature handsets. You know, smartphones—and that’s just one significant example there. So operators are getting more and better continued experiences with data [inaudible]. Obviously the consumers are widely demanding these data services. And that just leads to a natural occurrence of more feature capable phones. On the fourth quarter guidance, I would first point out, as I explained earlier, that our operating income growth for the year is up quite a bit more than what is our net earnings forecast. And that is because we have brought down our guidance for what we’ll earn in our cash and marketable securities portfolio. So that alone, looking fourth quarter last year to fourth quarter of this year, it’s a range of about $0.04 a share. Licensing business we expect to be up fourth quarter last year to fourth quarter of this year As you pointed out, last year didn’t have Nokia and we’re assuming right now that we won’t be reporting Nokia in this fourth fiscal quarter. The chip business, earnings year over year, at this point I expect to be relatively flat. At this point we’re expecting a mixed shift in the fourth quarter, as Sanjay mentioned. We’re going to see quarterly swings in QCT’s revenue [inaudible] and up margin simply because we have such a wide range of products available for our customers and as the mix in one quarter changes to another we’re going to see those swings. But overall I think the trend there is positive. Lastly, I’ll just point out. We made a few acquisitions that are driving some earnings dilution on a year-over-year basis. That’s how I would look at it. And of course, we’re continuing our R&D investments.

And ladies and gentlemen, we have reached the end of the allotted time for questions and answers today. Dr. Jacobs, do you have any final comments you would like to make?

I would just like to say that we’re pleased how well the business is running and how it’s very diversified geographically. These strong results give us a lot of flexibility so we’re able to return cash to shareholders, but at the same time invest significantly in the business, and as you heard, we’re investing strongly in R&D and in filing new patents and we’re very encouraged by the traction that we’re seeing for a lot of our past initiatives that we’re now seeing come to market, like Snapdragon and GLO B and QChat and mirasol. And all these kinds of things that we’ve been working on. And then obviously we’re driving the 3G roadmap very hard. But we also have exciting new technologies in [inaudible] space. Then we’re doing other things. For example, buying Spectrum from Mediapro and other new wireless technologies that might follow a similar sort of road map. So, a lot of opportunities for us, a lot of flexibility for us. I think at the end of the day it just comes back down to what I’ve been saying for a long time. It’s really about focus and execution. We’re seeing a lot of expansion and opportunities and we’re glad to be in a market where the operators and customers are adopting wireless broadband worldwide. Thanks everybody for being with us. We’ll talk to you again soon.