輝達 (NVDA) 2005 Q4 法說會逐字稿

Welcome to the PortalPlayer, Inc. fourth quarter and year-end 2005 earnings call.

歡迎參加 PortalPlayer, Inc. 2005 年第四季度和年終財報電話會議。

[OPERATOR INSTRUCTIONS] At this time, for opening remarks and introductions I would like to turn the call over to Kristine Mozes, Investor Relations for PortalPlayer. Please go ahead, ma'am.

[操作員說明] 目前，關於開場白和介紹，我想將電話轉給 PortalPlayer 投資者關係部的 Kristine Mozes。請繼續，女士。

Thank you. And thank you for joining us today. In addition to this call being recalled by phone replay it's being broadcast live via the Investor Relations page of PortalPlayer's web site at www.PortalPlayer.com. Earlier today, we issued our earnings press release and filed it with the SEC. The press release is also available on PortalPlayer's web site. That press release contains certain non-GAAP financial measures, which we will discuss during today's call, together with the most directly comparable financial measures calculated in accordance with GAAP and reconciliations of the differences between these measures.

謝謝你。感謝您今天加入我們。除了通過電話重播召回該電話外，該電話還通過 PortalPlayer 網站 www.PortalPlayer.com 的投資者關係頁面進行現場直播。今天早些時候，我們發布了我們的收益新聞稿並提交給了美國證券交易委員會。該新聞稿也可在 PortalPlayer 的網站上獲得。該新聞稿包含某些非公認會計原則財務指標，我們將在今天的電話會議中討論這些指標，以及根據公認會計原則計算的最直接可比的財務指標以及這些指標之間差異的對賬。

With me today is Gary Johnson, President and CEO of PortalPlayer, and Olav Carlsen, PortalPlayer's Chief Financial Officer. I will begin this call by reading our Safe Harbor statement. The statements on today's call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements include, but are not limited to, statements as to our future plans and growth, development efforts, features, benefits and introductions of products and technology, entrance into new markets, our plans to hire additional resources, our and our customers' market positions, our revenue growth including revenue from the Flash market and timing thereof, market trends and demands for high capacity players and anticipated growth of this market, market trends and demand for differentiated notebooks and anticipated growth of this market, availability of Microsoft Vista Slideshow technology, market trends and demand for products with wireless connectivity and anticipated growth of this market, potential acquisitions, demands for our product and future financial results, GAAP, and non-GAAP, including revenue, net income, expenses, gross margins, ASPs, stock-based compensation charges, tax rates, cash flow, weighted average shares outstanding, and operating expenses included but not limited to future R&D spending and selling, general and administrative expenses.

今天和我在一起的是 PortalPlayer 總裁兼首席執行官 Gary Johnson 和 PortalPlayer 首席財務官 Olav Carlsen。我將從閱讀我們的安全港聲明開始本次電話會議。今天電話會議上的陳述並非歷史事實，屬於《私人證券訴訟改革法案》含義內的前瞻性陳述。這些前瞻性陳述包括但不限於關於我們未來計劃和增長、開發努力、特性、優勢和產品和技術的介紹、進入新市場、我們僱用額外資源的計劃、我們和我們的客戶的市場地位、我們的收入增長，包括來自閃存市場的收入及其時機、市場趨勢和對高容量玩家的需求以及該市場的預期增長、市場趨勢和對差異化筆記本電腦的需求以及該市場的預期增長、微軟的可用性Vista 幻燈片技術、市場趨勢和對無線連接產品的需求以及該市場的預期增長、潛在收購、對我們產品的需求和未來財務業績、GAAP 和非 GAAP，包括收入、淨收入、費用、毛利率、平均售價、基於股票的薪酬費用、稅率、現金流、加權平均流通股和運營費用es 包括但不限於未來的研發支出和銷售、一般和管理費用。

These forward-looking statements are subject to a number of risks and uncertainties that can cause actual results to differ materially from those discussed in these forward-looking statements. Please refer to today's earnings release, our Form 10-K for the year ended December 31 2004, and our Form 10-Q for the quarter ended September 30th, 2005, as filed with the SEC, and from time to time in our other SEC reports. For information on risk factors that can cause actual results to differ materially from those discussed in these forward-looking statements. These forward-looking statements speak only as of the date hereof, PortalPlayer disclaims any intent or obligation to update these forward-looking statements.

這些前瞻性陳述受到許多風險和不確定性的影響，可能導致實際結果與這些前瞻性陳述中討論的結果大不相同。請參閱今天的收益報告、我們截至 2004 年 12 月 31 日止年度的 10-K 表格和截至 2005 年 9 月 30 日的季度的 10-Q 表格，這些表格已提交給 SEC，並且不時提交給我們的其他 SEC報告。有關可能導致實際結果與這些前瞻性陳述中討論的結果大不相同的風險因素的信息。這些前瞻性陳述僅在本協議發布之日發表，PortalPlayer 不承擔更新這些前瞻性陳述的任何意圖或義務。

Additionally, this conference call is the property of PortalPlayer, and may not be recorded or rebroadcast without specific written permission from the company. Now, I would like to turn the call over to Gary for his introductory remarks. Gary?

此外，本次電話會議是 PortalPlayer 的財產，未經公司明確書面許可，不得錄製或轉播。現在，我想將電話轉給 Gary 進行介紹性發言。加里？

Thank you and welcome, everyone.

謝謝大家，歡迎大家。

2005 was certainly an outstanding year for PortalPlayer. On the financial side, we grew our annual revenue from $93 million in 2004, to $225 million in 2005. We also increased our profitability significantly year-over-year, and have impressive shipment activities throughout the entire quarter, including the last three weeks, which we recognize as deferred revenue. We are very proud of these results and believe that there's significant opportunity for growth in our current market of personal media players. And that we also have many opportunities ahead of us to leverage our technology to other fast-growing portable multimedia markets. We are really looking forward to the future.

2005 年對於 PortalPlayer 來說無疑是傑出的一年。在財務方面，我們的年收入從 2004 年的 9300 萬美元增長到 2005 年的 2.25 億美元。我們的盈利能力也比去年同期顯著提高，整個季度（包括過去三週）的出貨活動令人印象深刻，我們將其確認為遞延收入。我們對這些結果感到非常自豪，並相信我們當前的個人媒體播放器市場存在巨大的增長機會。而且我們還有很多機會將我們的技術用於其他快速增長的便攜式多媒體市場。我們真的很期待未來。

To help support this growth in 2005, we organized the business into three product divisions: Each focusing on a different market opportunity, personal media players, personal media displays, and personal wireless entertainment. In the personal media space, we achieved very impressive results this year. We introduced innovative new technologies, such as our PP 5022 family which tripled the battery life of media players and features our MPEG 4 and motion JPEG capabilities, and our 5024 which is our first device to integrate the media processor along with the audio power management and battery charging features in a single package.

為幫助支持 2005 年的增長，我們將業務分為三個產品部門：每個部門專注於不同的市場機會、個人媒體播放器、個人媒體顯示器和個人無線娛樂。在個人媒體領域，我們今年取得了非常可觀的成績。我們引入了創新的新技術，例如我們的 PP 5022 系列，它將媒體播放器的電池壽命延長了兩倍，並具有我們的 MPEG 4 和運動 JPEG 功能，以及我們的 5024，它是我們第一款將媒體處理器與音頻電源管理和單個封裝中的電池充電功能。

In September the iPod Nano, the first Flash-based media player using our technology, was introduced into the market with great success. As a result we extended our leadership position in the personal media player market to include Flash and hard drive-based storage. We also worked very aggressively on new technologies in 2005. We can't share details of all the projects we are focusing on just yet, but one result of our hard work was the successful launch at CES of our new PortalPlayer Preface technology, the implementation of which garnered much attention and media attention during the show.

9 月，第一款使用我們技術的基於 Flash 的媒體播放器 iPod Nano 成功推向市場。因此，我們擴大了我們在個人媒體播放器市場的領先地位，包括閃存和基於硬盤的存儲。 2005 年，我們還非常積極地研究新技術。我們還不能分享我們目前正在關注的所有項目的細節，但我們努力工作的結果之一是我們在 CES 上成功推出了新的 PortalPlayer Preface 技術，實施其中，在展會期間引起了廣泛關注和媒體關注。

We believe the new technology will expand into a major market segment, personal media displays, a new, exciting feature for notebook computers in 2006 and beyond. We'll talk more about that market in a few minutes. In addition to working on these new opportunities, we are also looking at ways we can incorporate wireless connectivity into new multimedia devices. We were proud to see the Sirius Satellite Radio, the first wireless customer shipping the revolutionary Sirius S50, a CES Innovation 2006 Award honoree in the portable audio category. In addition, our newly created personal wireless entertainment division has been working very hard on next generation wireless technologies.

我們相信這項新技術將擴展到一個主要的細分市場，即個人媒體顯示器，這是 2006 年及以後筆記本電腦的一項新的、令人興奮的功能。我們將在幾分鐘內詳細討論該市場。除了致力於這些新機會之外，我們還在尋找將無線連接整合到新多媒體設備中的方法。我們很自豪地看到 Sirius 衛星收音機，這是第一個交付革命性的 Sirius S50 的無線客戶，它是 2006 年 CES 創新獎便攜式音頻類別的獲獎者。此外，我們新成立的個人無線娛樂部門一直在努力開發下一代無線技術。

In a few minutes I will go into more detail on each of these initiatives but first I will turn the call over to Olav would will take you through the details of our fourth quarter and year-end financials.

幾分鐘後，我將詳細介紹這些舉措中的每一項，但首先我會將電話轉給 Olav，他將帶您了解我們第四季度和年終財務的詳細信息。

Thank you, Gary and welcome, everyone.

謝謝你，加里，歡迎大家。

This fourth quarter of '05 was again another record quarter in many ways. We are proud to announce that revenue was a record $78.2 million which is a 75% increase from the $44.7 million in the same period a year ago, and 35% higher than the revenue of $57.9 million we recorded in the third quarter of 2005. This is above our guidance range of 65 to $75 million due to the fact that we met stronger than expected demand, especially in the second half of the quarter.

05 年第四季度在許多方面又是一個創紀錄的季度。我們很自豪地宣布，收入達到創紀錄的 7820 萬美元，比去年同期的 4470 萬美元增長 75%，比 2005 年第三季度的收入 5790 萬美元高出 35%。由於我們滿足的需求強於預期，尤其是在本季度的下半年，因此高於我們 65 至 7500 萬美元的指導範圍。

As Gary mentioned earlier, we had a very high level of shipping activity throughout the entire quarter. Our Q1 guidance of $70 to $80 million reflects the strong late quarter activity, as well as some expected seasonal decline for Q1, but less of a decline than you would expect after a very strong holiday quarter.

正如 Gary 之前提到的，我們在整個季度都有非常高水平的航運活動。我們第一季度 70 至 8000 萬美元的指導反映了強勁的季度末活動，以及第一季度預期的一些季節性下降，但在一個非常強勁的假期季度之後，下降幅度低於您的預期。

Revenue from our largest customer represented about 95% of our total revenue, as market share shifted again in favor of this customer's very popular new model which features innovative form factors and revolutionary capabilities. Having said that, in Q4 revenue from our other customers increased to about $3.9 million, and we're certainly are very proud about our new design wins at Sirius Satellite Radio, Phillips, and SanDisk, and more about this in a few moments.

我們最大客戶的收入約占我們總收入的 95%，因為市場份額再次轉向該客戶非常受歡迎的新型號，該型號具有創新的外形尺寸和革命性的功能。話雖如此，在第四季度，來自其他客戶的收入增加到約 390 萬美元，我們當然為我們在 Sirius Satellite Radio、Phillips 和 SanDisk 贏得的新設計感到非常自豪，稍後還會對此進行更多介紹。

Our fourth quarter gross margin of 46.2% continued to be above our operating target margin of 41 to 44%, and I want to remind everyone again that our financial forecast is based on a 41 to 44% growth margin range. Net income for the fourth quarter was $23.8 million, compared with a net income of $10.5 million in the same period a year ago. This fourth quarter 2005 net income resulted in an income of $0.92 per diluted share, based on $25.8 million weighted average shares outstanding, compared to a net income of $0.50 per diluted share based on approximately $21.1 million weighted average shares outstanding in the same quarter a year ago.

我們第四季度 46.2% 的毛利率繼續高於我們 41% 至 44% 的運營目標利潤率，我想再次提醒大家，我們的財務預測是基於 41% 至 44% 的利潤率增長范圍。第四季度的淨收入為 2380 萬美元，而去年同期的淨收入為 1050 萬美元。 2005 年第四季度的淨收益為每股攤薄收益 0.92 美元，基於 2580 萬美元的加權平均流通股，而基於每年同一季度約 2110 萬美元的加權平均流通股，每股攤薄收益為 0.50 美元前。

The significant difference in share count between these two quarters is, of course, due to the fact that we went public in the middle of the fourth quarter a year ago, and the newly issued IPO shares were partially included in last Q4's share count, using the required weighted average method. Net income in the third quarter of 2005 was $10.3 million or $0.40 per diluted share, based on 25.5 million weighted average shares. In terms of taxes, we saw a one-time benefit this quarter, which impacted our results by $8.6 million or $0.33 per diluted share.

這兩個季度股票數量的顯著差異當然是由於我們在一年前的第四季度中期上市，並且新發行的 IPO 股票部分包含在去年第四季度的股票數量中，使用所需的加權平均方法。 2005 年第三季度的淨收入為 1030 萬美元或稀釋後每股 0.40 美元，基於 2550 萬股加權平均股數。在稅收方面，我們在本季度看到了一次性收益，這對我們的業績產生了 860 萬美元或每股攤薄收益 0.33 美元的影響。

Based on our recent strong financial performance in our financial forecast, we evaluated our deferred tax asset position and adjusted our valuation allowances accordingly. In doing this, we anticipated in the fourth quarter the favorable effect of some remaining tax NOLs. Now that we have used in 2005 most of the favorable effects from our pre-IPO losses, our effective tax rate for Q1 is expected to be at 35%, which is about the same as we had predicted in the past. When comparing year-over-year results in the future, it will be important to keep the difference in tax rates between '05 and 2006 in mind.

基於我們近期財務預測中強勁的財務表現，我們評估了我們的遞延所得稅資產狀況並相應地調整了我們的估值準備。為此，我們預計第四季度一些剩餘稅收 NOL 的有利影響。現在我們已經在 2005 年利用了 IPO 前虧損的大部分有利影響，我們第一季度的有效稅率預計為 35%，這與我們過去的預測大致相同。在比較未來的同比結果時，重要的是要牢記 05 年和 2006 年之間的稅率差異。

Now, excluding stock-based compensation charges of $664,000, and the one-time tax benefit non-GAAP net income for the fourth quarter of '05 was $15.9 million or $0.62 per diluted share. This, compared with a non-GAAP net income in the fourth quarter of '04, of approximately $11.2 million, or $0.53 per diluted share and non-GAAP net income for the third quarter of '05 was $11 million or $0.43 per diluted share. We provided the detailed reconciliation between GAAP numbers and the non-GAAP numbers, which detailed the stock compensation charges for each quarter, as well as the one-time tax adjustment.

現在，不包括 664,000 美元的股票補償費用，以及 05 年第四季度的一次性稅收優惠非 GAAP 淨收入為 1590 萬美元或每股攤薄收益 0.62 美元。這與 04 年第四季度的非 GAAP 淨收入約為 1120 萬美元或稀釋後每股 0.53 美元相比，05 年第三季度的非 GAAP 淨收入為 1100 萬美元或稀釋後每股 0.43 美元。我們提供了 GAAP 數字和非 GAAP 數字之間的詳細核對，其中詳細說明了每個季度的股票薪酬費用，以及一次性稅收調整。

Now here's some other details on this quarter's P&L. In Q4, our ASPs and costs were in line with our expectations, since we began shipping our 5022 family about a year ago, ASPs for the SKU have decreased by 20% which is the low end of our financial forecast, of an ASP decline of 20 to 25% on individual SKU basis. Operating expenses were about $18.8 million for R&D, and SG&A in the fourth quarter, $1.8 million above our guidance, and as we experienced strong revenue growth, we increased our spending level accordingly, with our financial operating model in mind and so operating expenses again, like in previous quarters came in at our target level of about 24% of our revenues. $12.7 million of this, or 16.3% of our revenue was allocated to our R&D activities as we continue to successfully accelerate some of our important R&D milestones.

現在這裡有一些關於本季度損益表的其他細節。在第四季度，我們的 ASP 和成本符合我們的預期，自從我們大約一年前開始出貨 5022 系列以來，SKU 的 ASP 下降了 20%，這是我們財務預測的低端，ASP 下降了基於單個 SKU 的 20% 到 25%。第四季度的研發和 SG&A 運營費用約為 1880 萬美元，比我們的指導高出 180 萬美元，隨著我們經歷強勁的收入增長，我們相應地提高了支出水平，同時考慮到我們的財務運營模式和運營費用，與前幾個季度一樣，我們的目標水平約為我們收入的 24%。隨著我們繼續成功加快一些重要的研發里程碑，其中 1270 萬美元或我們收入的 16.3% 分配給了我們的研發活動。

We were able, again, to attract many strategically important new employees, mostly in engineering areas here in the U.S. and in India. Going forward, in Q1 we expect to continue to manage our R&D spending to about 17% of our revenues, or about $13 million.

再次，我們能夠吸引許多具有戰略意義的新員工，主要是在美國和印度的工程領域。展望未來，在第一季度，我們預計將繼續將我們的研發支出控制在收入的 17% 左右，即約 1300 萬美元。

SG&A expenses in the fourth quarter were $6 million, which is a $2 million increase from the previous quarter, and is within our long-term operating model. This increase is mostly driven by additional costs associated with our Sarbanes-Oxley compliance and one-time expenses related to the filing of our S-1 in October of 2005. In Q1 we expect SG&A to remain within our long-term operating model n of about 7% of revenue, or about $5.2 million, $800,000 below our Q4 spending level.

第四季度的 SG&A 費用為 600 萬美元，比上一季度增加了 200 萬美元，屬於我們的長期運營模式。這一增長主要是由於與我們的 Sarbanes-Oxley 合規相關的額外成本以及與 2005 年 10 月提交 S-1 相關的一次性費用。在第一季度，我們預計 SG&A 將保持在我們的長期運營模式 n約 7% 的收入，或約 520 萬美元，比我們第四季度的支出水平低 800,000 美元。

Our stock-based compensation charge of $664,000 included, as always, elements of amortization of deferred compensation, some variable charges, and a charge for amortizing the expense of restricted share grants that we began issuing in 2005. Going forward, we will record stock-based compensation in accordance with FAS 123R, and will find the elements of these charges in the gross margin, and R&D and SG&A operating expenses, as well as the benefit from these expenses in our tax provision.

我們的股票薪酬費用為 664,000 美元，與往常一樣，包括遞延薪酬的攤銷、一些可變費用以及我們於 2005 年開始發行的限制性股票授予費用的攤銷費用。展望未來，我們將記錄股票-基於 FAS 123R 的薪酬，並將在毛利率、研發和 SG&A 運營費用中找到這些費用的要素，以及在我們的稅收準備金中從這些費用中獲得的收益。

For Q1, we expect our total compensation charge under FAS 123R to be about $2.4 million or about $1.8 million net of certain tax effects. Now let's turn to the balance sheet. Our inventory balance at December 31st was $7.2 million, most of which is finished goods. This represents 10 to 11 days of inventory, once again, below our targeted goal of 30 days, reflecting the very strong activity level we saw at the end of the quarter. And accordingly, I will defer to income position, which represents the gross margin for shipments in the last three weeks of the quarter, was again at a very high level of $10.9 million. Headcount at the end of the quarter was about 284, during the fourth quarter we added 34 very talented employees to our ranks, most of them in R&D. For the full year, we added a total of 103 new employees. As in previous quarters approximately 80% of our overall head count was focused on our current or strategic R&D activities and, again, about half of our overall head count was based in Hyderabad, in India.

對於第一季度，我們預計 FAS 123R 下的總補償費用約為 240 萬美元，或扣除某些稅收影響後約為 180 萬美元。現在讓我們轉向資產負債表。我們在 12 月 31 日的庫存餘額為 720 萬美元，其中大部分是製成品。這代表 10 到 11 天的庫存，再次低於我們 30 天的目標，反映了我們在本季度末看到的非常強勁的活動水平。因此，我將推遲收入狀況，即本季度最後三週的出貨毛利率再次處於 1090 萬美元的高水平。本季度末的員工人數約為 284 人，在第四季度，我們為我們的隊伍增加了 34 名非常有才華的員工，其中大部分從事研發工作。全年新增員工103人。與前幾個季度一樣，我們總人數的大約 80% 專注於我們當前或戰略性的研發活動，同樣，我們總人數的大約一半位於印度海得拉巴。

And now turning briefly from the fourth quarter to fiscal 2005 results, net revenue for fiscal 2005 was $225.2 million, up 143% from the $92.6 million in revenue for fiscal 2004. Net income for the year was $48.2 million or an income of $1.90 per diluted share based on 25.4 million weighted average shares outstanding. This compares with a net income of $10.4 million, or $0.57 per diluted share based on about 18.1 million weighted average shares outstanding in 2004.

現在從第四季度到 2005 財年的業績，2005 財年的淨收入為 2.252 億美元，比 2004 財年的 9,260 萬美元增長了 143%。當年的淨收入為 4,820 萬美元或稀釋後收入為 1.90 美元2540 萬股加權平均流通股。相比之下，根據 2004 年約 1810 萬股加權平均流通股，淨收入為 1040 萬美元，或稀釋後每股 0.57 美元。

Non-GAAP net income for fiscal 2005 was $41.8 million, or $1.65 per diluted share, which excludes the fourth quarter tax benefit, and non-cash compensation charges. This compared with a non-GAAP net income of $16.2 million, or $0.89 per diluted share in fiscal 2004, excluding non-cash compensation charges. And before I turn the call back over to Gary, let me summarize our guidance for the first quarter.

2005 財年非公認會計原則的淨收入為 4180 萬美元，即每股攤薄收益 1.65 美元，其中不包括第四季度的稅收優惠和非現金補償費用。相比之下，2004 財年非 GAAP 淨收入為 1620 萬美元，即每股攤薄收益 0.89 美元，不包括非現金補償費用。在我將電話轉回給加里之前，讓我總結一下我們對第一季度的指導。

Revenue is expected to come in between 70 and $80 million, total OpEx before stock charges is expected to be about 24% of revenue or about $18.2 million, stock-based compensation charges are expected to come in at $1.8 million, net of tax, GAAP net income per diluted share is expected to be between $0.28 and $0.38 based on approximately 26.5 million weighted average shares outstanding, and excluding the net effect of our stock compensation charges, non-GAAP net income per diluted share is expected to be between $0.35 and $0.45.

收入預計在 70 至 8000 萬美元之間，股票費用前的總運營支出預計約為收入的 24% 或約 1820 萬美元，基於股票的薪酬費用預計為 180 萬美元，稅後，GAAP根據大約 2650 萬股加權平均流通股，每股攤薄淨收入預計在 0.28 美元至 0.38 美元之間，不包括我們的股票補償費用的淨影響，非公認會計準則每股攤薄淨收入預計在 0.35 美元至 0.45 美元之間.

And at this time, I would like to turn the call back over to Gary for his comments. Gary?

在這個時候，我想把電話轉回給加里徵求他的意見。加里？

Thank you, Olav. Thank you.

謝謝你，奧拉夫。謝謝你。

All around another great quarter, and a great year for PortalPlayer, financially, operationally, and technically. I would like to thank the entire PortalPlayer team here in the U.S., in India, Taiwan, Korea, and Japan for continuing to execute impeccably on business plan, follow our roadmap and in supporting our world-class customers. As I mentioned earlier, we organized the business into three product divisions last year focusing on personal media players, personal media displays and personal wireless entertainment.

又是一個偉大的季度，也是 PortalPlayer 偉大的一年，無論是財務上、運營上還是技術上。我要感謝美國、印度、台灣、韓國和日本的整個 PortalPlayer 團隊，他們繼續無可挑剔地執行業務計劃，遵循我們的路線圖並支持我們的世界級客戶。正如我之前提到的，我們去年將業務分為三個產品部門，專注於個人媒體播放器、個人媒體顯示器和個人無線娛樂。

First, let's talk about our personal media player division. In the fourth quarter, we focused a lot of our attention on our operational execution, supporting our customers as they significantly ramp their newly introduced products in the holiday season and getting new customers ready to introduce their products. Our largest customer had an excellent quarter; as for other customers, we recently announced that our technology is in the new SanDisk Sensor, E200 series of MP3 players and the Phillips Go Gear HDD 6330 and 1630 personal media players. SanDisk E200 series, which features music playback, photo and video capabilities, is the first media player to use our 5024 device, and it comes in two, four and six gigabyte Flash models.

首先，讓我們談談我們的個人媒體播放器部門。在第四季度，我們將大量注意力集中在我們的運營執行上，為我們的客戶提供支持，因為他們在假期期間大幅增加了新推出的產品，並讓新客戶準備好推出他們的產品。我們最大的客戶有一個出色的季度；至於其他客戶，我們最近宣布我們的技術用於新的 SanDisk Sensor、E200 系列 MP3 播放器以及 Phillips Go Gear HDD 6330 和 1630 個人媒體播放器。閃迪 E200 系列具有音樂播放、照片和視頻功能，是第一款使用我們 5024 設備的媒體播放器，它有 2、4 和 6 GB 閃存型號。

SanDisk just introduced these players at CES few weeks ago and they already received rave reviews. The Phillips Go models offer customers access to music, photos, FM radio, and voice recordings with an intuitive sensory touch pad and are available in 30 gig and 6 gigabytes HDD models. Phillips is one of the world's most recognizable customer brands and we are proud to be working again with them on these new personal media players. These new models, together with Apple's iPod, and iPod Nano, are examples of products in which we call -- in what we call the feature rich segment of the personal media player market.

SanDisk 幾週前剛剛在 CES 上介紹了這些播放器，它們已經獲得了好評如潮。 Phillips Go 型號通過直觀的感官觸摸板為客戶提供音樂、照片、FM 收音機和錄音，並提供 30 GB 和 6 GB 硬盤型號。菲利普斯是世界上最知名的客戶品牌之一，我們很自豪能再次與他們合作開發這些新的個人媒體播放器。這些新型號，連同 Apple 的 iPod 和 iPod Nano，就是我們所說的產品的例子——我們稱之為個人媒體播放器市場的功能豐富的細分市場。

Products in this feature rich segment include color displays, sophisticated features such as photo, video and gaming capabilities, in addition to playing music and large storage capabilities. In the future, we believe that this feature rich segment of the personal media player market will see very strong growth rates. We estimate that this portion of the market will almost double from about 35 million units in 2005 to about 64 million units in 2006. We intend to continue to be the leader in this segment. In contrast to the feature rich segment, personal media players that have no display or simple or single or double line displays, limited storage capacity, and only play music, we call the value portion of the market. These products are typically characterized by little opportunity for product differentiation, and low barriers to entry.

除了播放音樂和大容量存儲功能外，這一功能豐富的產品還包括彩色顯示器、照片、視頻和遊戲功能等複雜功能。未來，我們相信個人媒體播放器市場這一功能豐富的細分市場將出現非常強勁的增長速度。我們估計這部分市場將幾乎翻一番，從 2005 年的約 3500 萬台增加到 2006 年的約 6400 萬台。我們打算繼續成為這一領域的領導者。與功能豐富的細分市場相比，個人媒體播放器沒有顯示器或簡單或單線或雙線顯示器，存儲容量有限，只播放音樂，我們稱之為市場的價值部分。這些產品的典型特點是產品差異化機會少，進入門檻低。

We want to lead in the space where features, functionality and innovation are key. We believe that there are several significant drivers that are going to fuel demand for higher capacity media players, with additional functionality. Including the availability of video content, satellite radio services, PBR capabilities, subscription services, podcasts and wireless connectivity.

我們希望在功能、功能和創新是關鍵的領域處於領先地位。我們認為，有幾個重要的驅動因素將推動對具有附加功能的更高容量媒體播放器的需求。包括視頻內容的可用性、衛星廣播服務、PBR 功能、訂閱服務、播客和無線連接。

Now let's talk about our personal media display division. This new product division leverages our current leadership in the personal media player market into other markets That can benefit from low power multimedia displays. The first new market addressed by this division is the secondary displays for notebook computers. These displays, an anticipated new feature in notebooks will be located on the outsides of the lid of the notebook, and allow the consumers to access key data, application, music, photos, and video content without having to turn on and boot up the notebook. In order to enable the best customer experience for this new feature, it should be tightly integrated with the operating system and applications on the notebook.

現在來說說我們的個人媒體展示部門。這個新的產品部門利用我們目前在個人媒體播放器市場的領先地位進入其他可以從低功耗多媒體顯示器中受益的市場。該部門的第一個新市場是筆記本電腦的輔助顯示器。這些顯示器是筆記本電腦的一項預期新功能，將位於筆記本電腦蓋的外側，使消費者無需打開和啟動筆記本電腦即可訪問關鍵數據、應用程序、音樂、照片和視頻內容.為了使這項新功能獲得最佳客戶體驗，它應該與筆記本電腦上的操作系統和應用程序緊密集成。

With this in mind the personal media display division has been working very closely with Microsoft, to enable this capability in Microsoft's slide show technology which is part of the Microsoft Vista operating system. We recently launched our solutions to in market under the name Preface and in a book, the preface is the first thing you read and from this case the Preface-enabled display is the first thing you will look at on your notebook. In addition to eliminating the need to boot the computer to access the notebook content, a process that can take between two and four minutes, the low-powered nature of the Preface technology platform can enable up to 500 hours of music playback on the notebook. The low powered capabilities of the Preface platform also enabled access to certain notebook content for tens of hours, even if the battery is depleted to the point where the notebook can no longer boot up.

考慮到這一點，個人媒體顯示部門一直與 Microsoft 密切合作，以在 Microsoft Vista 操作系統中的 Microsoft 幻燈片放映技術中啟用此功能。我們最近以 Preface 的名義在市場上推出了我們的解決方案，在一本書中，前言是您閱讀的第一件事，在這種情況下，啟用 Preface 的顯示器是您在筆記本電腦上看到的第一件事。 Preface 技術平台的低功耗特性可以在筆記本電腦上播放長達 500 小時的音樂，除了無需啟動計算機即可訪問筆記本內容（這一過程可能需要 2 到 4 分鐘）。 Preface 平台的低功耗功能還支持在數十小時內訪問某些筆記本電腦內容，即使電池電量耗盡到筆記本電腦無法再啟動時也是如此。

Initially notebooks that incorporate this technology will have access to data such as music, picture slide shows, Outlook calendar, e-mail, contact information, alarms, clocks, battery meters, and so forth. In addition, Microsoft is making this an open platform so third-party developers will be able to write their own applications, known as gadgets, allowing users access to many kinds of data stored on the notebook. In addition to Microsoft, we have also been working with partners such as Altura, Authentec, and Symantec to offer a variety of interfaces for these personal media displays.

最初，採用該技術的筆記本電腦將可以訪問音樂、圖片幻燈片、Outlook 日曆、電子郵件、聯繫信息、鬧鐘、時鐘、電池電量表等數據。此外，微軟正在將其打造為一個開放平台，因此第三方開發人員將能夠編寫自己的應用程序，稱為小工具，允許用戶訪問存儲在筆記本電腦上的多種數據。除了 Microsoft，我們還與 Altura、Authentec 和 Symantec 等合作夥伴合作，為這些個人媒體顯示提供各種界面。

According to Gartner, notebooks are the fastest growing segment in the PC market and we believe that manufacturers are looking for ways to differentiate their products. The PortalPlayer Preface technology enables visible differentiation to the design and the use of notebooks which really have not changed since they were first introduced in the 1990s. We expect notebooks and secondary displays using Windows Vista to begin shipping in the second half of 2006. This year, we believe that total available market for this technology could be as high as 6 million units, growing to 16 million units next year and about 48 million units or almost half of the entire notebook market by 2008. Our targeted customers to Preface will be the top 10 OEM and ODM notebook manufacturers. In fact at CES we showed prototype designs from Quanta, and Asustec, which together make up a substantial portion of entire notebook market.

據 Gartner 稱，筆記本電腦是 PC 市場中增長最快的部分，我們相信製造商正在尋找使其產品與眾不同的方法。 PortalPlayer Preface 技術使筆記本電腦的設計和使用實現了明顯的差異化，這些筆記本電腦自 1990 年代首次推出以來並沒有改變。我們預計使用 Windows Vista 的筆記本電腦和輔助顯示器將在 2006 年下半年開始出貨。今年，我們相信這項技術的總可用市場可能高達 600 萬台，明年將增長到 1600 萬台，大約 48到 2008 年，百萬台或幾乎佔整個筆記本電腦市場的一半。Preface 的目標客戶將是排名前 10 位的 OEM 和 ODM 筆記本電腦製造商。事實上，在 CES 上，我們展示了來自 Quanta 和 Asustec 的原型設計，它們共同構成了整個筆記本電腦市場的很大一部分。

Our sales and promotion efforts for the preface platform were kicked off earlier this month at the Consumer Electronics Show in Las Vegas, where we were able to show the Preface technology to a wide variety of press, analysts and potential notebook OEM customers. The response from the wide ranging audience was enthusiastic interest in the technology, and interest for the notebook OEMs to incorporate the technology in the 2006 and the 2007 models. And also an energetic display of the preface technology Walt Mossberg on CNBC. We are very excited about this market and the opportunity gives us in leveraging our existing technology into an entirely new space, targeting a new customer base. Revenue from this new major market could potentially reach 10% of our overall revenue in 2006.

本月早些時候，我們在拉斯維加斯的消費電子展上啟動了 Preface 平台的銷售和推廣工作，在那裡我們能夠向各種媒體、分析師和潛在的筆記本 OEM 客戶展示 Preface 技術。廣大觀眾的反應是對該技術的濃厚興趣，以及筆記本 OEM 將這項技術整合到 2006 年和 2007 年型號中的興趣。並且還在 CNBC 上對前言技術 Walt Mossberg 進行了充滿活力的展示。我們對這個市場感到非常興奮，這個機會讓我們能夠利用現有技術進入一個全新的空間，瞄準新的客戶群。 2006 年，這個新的主要市場的收入可能達到我們總收入的 10%。

Our personal wireless entertainment product division has also been hard at work, behind the scenes here at PortalPlayer. The group is focused both on the technology aspects of wireless, as well as understanding the ecosystem required to deliver compelling user experience on wirelessly connected devices. In addition, they are exploring opportunities to address the shortcomings in battery life and usability seen in many of the wireless devices already in the market today.

我們的個人無線娛樂產品部門也在 PortalPlayer 的幕後努力工作。該小組專注於無線技術方面，以及了解在無線連接設備上提供引人注目的用戶體驗所需的生態系統。此外，他們正在探索解決當今市場上許多無線設備在電池壽命和可用性方面存在的缺陷的機會。

Looking forward into 2006, we will continue efforts in the wireless space, by working with strategic customers, wireless technology partners, as well as considerating strategic wireless acquisitions as they make sense. In summary, we are extremely pleased with our accomplishment in 2005, and believe that 2006 will be even more exciting. We believe that the feature rich segment of the personal media player market could almost double year-over-year in 2006, offering us a great opportunity for continued growth in our core market. With the expected emergence of the personal media display market in the latter half of the year, this will allow us to further increase the market opportunities available to us, and diversify our customer and revenue base as well. We continue to invest in wireless technology, as we believe that this wireless connectivity will become an integral part of the overall consumer electronics landscape.

展望 2006 年，我們將在無線領域繼續努力，與戰略客戶、無線技術合作夥伴合作，並在有意義的情況下考慮戰略性無線收購。總之，我們對2005年的成績感到非常滿意，相信2006年會更加精彩。我們相信，功能豐富的個人媒體播放器市場在 2006 年可能會比去年同期翻一番，這為我們在核心市場中的持續增長提供了絕佳機會。隨著預計下半年個人媒體顯示市場的出現，這將使我們能夠進一步增加我們可用的市場機會，並使我們的客戶和收入基礎多樣化。我們繼續投資於無線技術，因為我們相信這種無線連接將成為整個消費電子領域不可或缺的一部分。

We are now happy to open up the call to take your questions about our business. I want to remind everyone that it is our policy not to comment on specific customer products or road map. Operator, we are ready for questions.

現在，我們很高興接聽您關於我們業務的問題。我想提醒大家，我們的政策是不對特定客戶的產品或路線圖發表評論。接線員，我們準備好提問了。

Thank you, sir. [ OPERATOR INSTRUCTIONS ].We'll pause for just a moment to assemble our roster. We'll take our first question from Randy Abrams with Credit Suisse First Boston.

謝謝你，先生。 [操作員說明]。我們將暫停片刻以整理我們的名單。我們將回答瑞士信貸第一波士頓的蘭迪艾布拉姆斯提出的第一個問題。

Yes, Thanks a lot. I wanted to start off, you mentioned the Phillips and SanDisk products and maybe talk about your outlook for diversification over the next couple of quarters, even more in the media division, as three customers ramp up.

是的，非常感謝。我想開始，你提到了菲利普斯和閃迪的產品，也許會談談你對未來幾個季度的多元化前景，尤其是在媒體部門，隨著三個客戶的增加。

Well, as you know, Randy, CES is a very busy time for us, for us to bring new designs and to bring new life to our potential customers. The designs that analysts and other folks saw at CES are a good preview for the first half, but I as I said, the ones we've announced so far are focused on the Phillips and SanDisk devices. The SanDisk device, I think brings some new innovations to the market, the capacity of the device is very nice, the user interface, but beyond -- beyond the SanDisk and Phillips devices we will not disclose new customer wins until our customers announce them.

好吧，如你所知，Randy，CES 對我們來說是一個非常忙碌的時期，我們需要為我們帶來新的設計並為我們的潛在客戶帶來新的生活。分析師和其他人在 CES 上看到的設計是上半年的一個很好的預覽，但正如我所說，我們迄今為止宣布的設計主要集中在 Phillips 和 SanDisk 設備上。我認為 SanDisk 設備為市場帶來了一些新的創新，設備的容量非常好，用戶界面，但超越了 - 除了 SanDisk 和 Phillips 設備之外，我們不會透露新的客戶勝利，直到我們的客戶宣布它們。

Okay. And Olav, I want to see if you could clarify, the ASP a unit year-over-year trends. I think you mentioned that 20%, was that a total company ASP for year-over-year?

好的。還有奧拉夫，我想看看你能否澄清一下，ASP 是一個單位的同比趨勢。我想你提到了 20%，這是公司的總 ASP 同比嗎？

Well, it almost turned into total company because we shipped -- most of our product we shipped basically, especially in the last three quarters of the year were the 5022 and so I only referenced the ASP decline for the 5022, which was a 20% year-over-year decline.

嗯，它幾乎變成了整個公司，因為我們發貨了——我們基本上發貨的大部分產品，尤其是在今年最後三個季度是 5022，所以我只提到了 5022 的 ASP 下降，即 20%同比下降。

Okay. And do you have the total year-over-year?

好的。你有全年的總數嗎？

The total year-over-year for the portfolio, is that what you are asking?

投資組合的同比總額，這就是您要問的嗎？

Yes.

是的。

It's below that. It's between 15 and 20%.

在它之下。它在 15% 到 20% 之間。

Okay. And then turning over to Preface, could you talk about -- I think you mentioned that displays is the first application. Maybe talk about some of the other applications where this technology starts to make sense.

好的。然後轉到前言，你能談談--我想你提到顯示器是第一個應用程序。也許談談這項技術開始有意義的其他一些應用程序。

Yes, the -- the other applications again revolve around multimedia displays and what Mossberg got excited about on CNBC, we had example prototypes at CES that showed this in intelligent remote controls, the ability to have rich display with lots of content on the remote controls, also, for example, front panels, for example, in media centers as media center PCs become more intelligent, you could well see a more intelligent user interface and panel for that market. Longer term, this type of application, I can see this moving to many markets, including automotive, but I would say, beyond notebooks, remote controls and media center PCs are that we have already demonstrated at CES.

是的，其他應用程序再次圍繞多媒體顯示以及 Mossberg 在 CNBC 上興奮不已，我們在 CES 上有示例原型，在智能遙控器中展示了這一點，能夠在遙控器上進行豐富的顯示和大量內容，例如，前面板，例如，在媒體中心中，隨著媒體中心 PC 變得更加智能，您很可能會看到針對該市場的更智能的用戶界面和麵板。從長遠來看，這種類型的應用程序，我可以看到它轉移到許多市場，包括汽車，但我想說，除了筆記本電腦、遙控器和媒體中心 PC，我們已經在 CES 上展示了這些。

Okay. And maybe one final question, just on the gross margin. Maybe talk about the trends that drove the upside in gross margins and then as you move into the notebook application, is there any prospect with that mix shift that it will carry a higher margin?

好的。也許還有最後一個問題，就毛利率而言。也許談談推動毛利率上升的趨勢，然後當你進入筆記本應用程序時，這種混合轉變是否有可能帶來更高的利潤率？

So the second part of your question, I don't believe that there's a shift. I think we feel very comfortable in the 41 to 44% target model that we are operating in longer term. So I see with the diversification of our business in the second half of the year, I don't see that margin model change. The -- the first part of your question was about the trends or the uptrend to the 46, or about 46% gross margin in Q4, again, I need to remind you, our long-term model is 41 to 44%. That's our target model. If because of customer mix, or cost developments specifically the development on the cost side, if we can have a specific quarter or even two quarters we are happy about that.

所以你問題的第二部分，我不相信會有轉變。我認為我們對我們長期運營的 41% 到 44% 的目標模型感到非常滿意。所以我看到下半年我們業務的多元化，我沒有看到利潤率模型發生變化。 - 你問題的第一部分是關於趨勢或上升趨勢到 46，或第四季度毛利率約為 46%，我需要再次提醒你，我們的長期模型是 41% 到 44%。這就是我們的目標模型。如果由於客戶組合，或成本發展，特別是成本方面的發展，如果我們可以有一個特定的季度甚至兩個季度，我們對此感到高興。

Okay. Thanks a lot, guys.

好的。非常感謝，伙計們。

Thank you.

謝謝你。

We'll take our next question from Glen Yeung with Citigroup.

我們將在花旗集團接受 Glen Yeung 的下一個問題。

Hi, this is [Peter Kirzares] with Glen Yeung. I wanted to ask going forward into the first quarter, your guidance is better than normal, seasonal decline. If we get a feel for how much of that would be coming from new customers, versus how much of that is coming from your existing customers, or, I guess your largest customer. And also if there's any benefit in pricing, as well.

嗨，我是 Glen Yeung 的 [Peter Kirzares]。我想問一下，進入第一季度，你的指導好於正常的季節性下降。如果我們了解其中有多少來自新客戶，有多少來自您的現有客戶，或者，我猜是您最大的客戶。如果定價有任何好處，也是如此。

So, Peter we don't break out our revenue guidance by customer, it's a matter of policy. We do give you data on past quarters but not in terms of guidance. We are very proud of the designs that are shipping from Phillips and Sirius and we are excited about SanDisk. Ultimately consumers will decide how much they like the products. They are certainly cool products out there. It's too early to break it up at this time. Can you remind me of the second part of your question?

所以，彼得，我們不會按客戶打破我們的收入指導，這是一個政策問題。我們會為您提供過去幾個季度的數據，但不會提供指導。我們對 Phillips 和 Sirius 的設計感到非常自豪，我們對 SanDisk 感到興奮。最終消費者將決定他們對產品的喜愛程度。它們肯定是很酷的產品。這個時候分手還為時過早。你能提醒我你問題的第二部分嗎？

That actually takes care of it. But I will ask you this then, on a separate subject, for wireless, as you are working through your wireless division, have you zeroed in or do you have any more clarity on what type of assets you might need to take in to -- as you bring the products to market? Or before you bring products to market?

這實際上會照顧它。但是我會問你這個，關於無線的一個單獨的主題，當你正在通過你的無線部門工作時，你是否已經開始關注或者你是否更清楚你可能需要接受什麼類型的資產——當您將產品推向市場時？還是在您將產品推向市場之前？

Well, yes, we -- we have honed in on the type of assets but they are not for discussion at this point. The technologies that obviously interest us most are technologies that can really add to our portfolio of low power technologies. When we look at wireless, in terms of a hand held device, we really want to focus around applications that will start to push you both in multimedia aspect and the low power aspects. So, we could use acquisitions as part of the methodology to acquire technology, and expertise there but we also, as you indicated have had a very active in internal development now during 2005. The short answer is it's too early to tip our hat, but we are narrowing in on what we think will be very important capabilities on the next generation platforms.

嗯，是的，我們 - 我們已經磨練了資產的類型，但目前不討論它們。顯然，我們最感興趣的技術是可以真正添加到我們的低功耗技術組合中的技術。當我們看無線時，就手持設備而言，我們真的希望專注於將開始在多媒體方面和低功耗方面推動您的應用。因此，我們可以將收購作為獲取技術和專業知識的方法的一部分，但正如您所指出的，我們在 2005 年期間現在在內部開發方面非常活躍。簡短的回答是現在給我們的帽子小費還為時過早，但是我們正在縮小我們認為下一代平台上非常重要的功能。

Great. Thank you.

偉大的。謝謝你。

And we'll take our next question from Jason Pflaum of Thomas Weisel Partners.

我們將向 Thomas Weisel Partners 的 Jason Pflaum 提出下一個問題。

Yes, good afternoon. Congratulations.

是的，下午好。恭喜。

Thanks.

謝謝。

Just to touch on the guidance, again, I guess looking at the deferred income line. It looks I can you have a third of your revenue guidance, I guess in the deferred income line heading into the quarter. What type of seasonality or linearity are you expecting in the quarter? Is it typically a back-end loaded quarter, maybe some color as far as that?

再次談談指導意見，我想看看遞延收入線。看起來我可以為您提供三分之一的收入指導，我猜是在進入本季度的遞延收入線中。您預計本季度會出現什麼類型的季節性或線性？它通常是後端加載的季度，可能是某種顏色嗎？

Are you suggesting that -- are you asking whether the first quarter is a back end specifically or the fourth?

你是在暗示——你是在問第一季度是具體的後端還是第四季度？

The first quarter, I'm interested in.

第一季，我很感興趣。

I don't think that the first quarter is a back-end loaded quarter. Number one, our guidance reflects everything that we know at this time, and most current business inputs. And to your question on the deferred revenue, yes, we have extremely busy three weeks activity there in the last three weeks. It is right that as a central portion of the revenue that we guide to, is already in that deferred portion. So that we realize in the Q1, it's certainly, we have to do some math and I can help with you that, how much of the deferred revenue is already sold through our customers in the fourth quarter and how much of that is going to be sold through by our customers in the first quarter.

我不認為第一季度是後端加載的季度。第一，我們的指導反映了我們目前所知道的一切，以及最新的業務投入。對於你關於遞延收入的問題，是的，過去三週我們在那裡的三週活動非常繁忙。正確的是，作為我們指導的收入的核心部分，已經在該遞延部分中。所以我們在第一季度意識到，當然，我們必須做一些數學計算，我可以幫助你，在第四季度已經通過我們的客戶銷售了多少遞延收入，其中有多少將是我們的客戶在第一季度售出。

All right. Okay. And then just again on the gross margin. I think your guidance, or you are implying that you would fall back within that 41 to 44% range in Q1. Can you talk about what the drivers of that would be, perhaps more pricing or maybe just a level of conservatism?

好的。好的。然後又是毛利率。我認為您的指導，或者您暗示您將在第一季度回落到 41% 到 44% 的範圍內。你能談談這會是什麼驅動因素，也許是更多的定價，或者只是某種程度的保守主義？

It's just a matter of consistency. This is our target model, 41 to 44. This is the model around which we model a very highly successful company of in financial terms so we would like to remind everyone about it. What could drive, the gross margin from 46 back to 44, 43, pricing and cost? And as new products will be introduced throughout the year, as costs, the manufacturers cost shed, it's easy to get a 2% change in your gross margin up and down, so we like to remind everyone about that target model of 41 to 44%.

這只是一致性的問題。這是我們的目標模型，從 41 到 44。這是我們在財務方面為一家非常成功的公司建模的模型，因此我們想提醒大家。什麼可以推動，毛利率從 46 回到 44、43、定價和成本？而且由於全年都會推出新產品，隨著成本，廠商成本下降，很容易讓你的毛利率上下波動2%，所以我們想提醒大家41%到44%的目標模型.

Okay. And then last question, just circling back on a missed opportunity. When you look into the design window, can you just talk generally about where you stand today as far as your interaction with customers? Have you locked in any design wins yet, just kind of talk about what gives you confidence in kind of your 10% revenue target by year end.

好的。然後是最後一個問題，只是在錯過的機會上盤旋。當您查看設計窗口時，您能否大致談談您今天與客戶的互動情況？你有沒有鎖定任何設計勝利，只是談談是什麼讓你對年底前 10% 的收入目標充滿信心。

Let me describe -- let me set the landscape, first of all. As you know, a good deal of the features and the benefits come in lock stead with Vista. And so we -- when we look -- that clearly looks towards a policy and second half opportunity for us.

讓我描述一下——首先讓我設置風景。如您所知，Vista 提供了大量的功能和優勢。所以我們——當我們看的時候——這顯然是為我們尋找政策和下半年的機會。

The notebook OEMs and ODMs all have different cycles. There are some OEMs and ODMs, for example, that already have plastics and cases designed into the -- you know the earlier '07 time period, but there are many others who have cycles throughout the year, and they are the ones that will be targeting as we look at the second half '06 opportunity. Again, we will be relying on the VISTA rollouts, but, again, by having the technology and having the technology demonstrated, frankly with two leaders at CES we believe the platform is stable, and it's now ready to be incorporated by the notebook OEMs and ODMs and we feel very encouraged by the feedback we are getting.

筆記本 OEM 和 ODM 都有不同的周期。例如，有一些 OEM 和 ODM 已經設計了塑料和外殼——你知道 07 年早期的時間段，但是還有很多其他的全年都有周期，他們就是那些目標是我們看 06 年下半年的機會。同樣，我們將依賴 VISTA 的推出，但是，再次，通過擁有技術並展示技術，坦率地說，在 CES 上與兩位領導者坦率地說，我們相信該平台是穩定的，現在它已經準備好被筆記本 OEM 和ODM 和我們收到的反饋讓我們感到非常鼓舞。

Okay. Very well. Thank you very much. Good luck.

好的。很好。非常感謝。祝你好運。

Thank you.

謝謝你。

And we'll take our next question from Quinn Bolton with Needham & Company.

我們將向 Needham & Company 的 Quinn Bolton 提出下一個問題。

Hello. Nice job on the quarter, guys.

你好。伙計們，本季度做得很好。

Thanks.

謝謝。

You reorganized now into three divisions. I'm just kind of wondering looking forward maybe in '07, I mean is this something you think over time you start to report revenue by division, just to give us a flavor as to what was the traditional personal media player, what was Preface or personal media displays and PWE on a good forward basis?

你現在重組為三個部門。我只是有點想知道，也許在 07 年，我的意思是你認為隨著時間的推移你會開始按部門報告收入，只是為了讓我們了解什麼是傳統的個人媒體播放器，什麼是序言還是個人媒體展示和 PWE 在良好的前鋒基礎上？

Again that might not make sense until later this year. Do you envision going in that direction when talking about revenues.

再一次，這可能直到今年晚些時候才有意義。在談論收入時，您是否設想朝著這個方向發展。

We have not made that decision yet. It's sort of premature but, you know, we'll certainly take input in that makes sense, we'll certainly look at that That but we have made no decisions on that at this point.

我們還沒有做出那個決定。這有點為時過早，但是，你知道，我們肯定會接受有意義的意見，我們肯定會考慮這一點，但我們目前尚未就此做出任何決定。

And then following up on Jason's question about the timing of the launch. It seems the Computex trade show in early June is one big trade show where you see a lot of the second half systems. Would you think that you have at least prototype systems or your customers might have prototype systems on the show floor sort of for display, in that time frame?

然後跟進 Jason 關於發佈時間的問題。看來 6 月初的 Computex 貿易展是一個大型貿易展，您可以在其中看到很多下半年的系統。您是否認為您至少有原型系統，或者您的客戶可能在展廳中有用於展示的原型系統，在那個時間範圍內？

I don't want to be that specific, frankly, in tying down sort of future design wins, that level of granularity. You are absolutely right, Computex is an important time of the year, and we, frankly, are -- from an investment point of view, investing quite significant resources now in our Taiwan office in terms of development expertise.

坦率地說，我不想那麼具體地束縛未來的設計勝利，那種粒度級別。你說得對，Computex 是一年中的重要時刻，坦率地說，從投資的角度來看，我們現在在台灣辦事處的開發專業知識方面投入了相當多的資源。

So we are very focused on that. As you pointed out, that would be, an important time of year for us but I don't want to go any further, in preannouncing customer design wins. As you know, the style base, we do that for all of our customers and we let our customers announce first and then generally we announce post their announcements. You are absolutely right, Computex will be a busy time.

所以我們非常關注這一點。正如您所指出的，那將是我們一年中的重要時刻，但我不想再進一步宣布客戶設計獲勝。如您所知，風格基礎，我們為所有客戶這樣做，我們讓我們的客戶首先宣布，然後通常我們宣布發布他們的公告。你說得對，Computex 會很忙。

Okay. Maybe one for Olav, I know you haven't introduced, formally introduced the new silicon platform, as you look at -- you talked about a 20 to 25% sort of per SKU price decline, what do you have on the road map in terms of process technology shrinks, either down to say, 0.11 or 90-nanometer is that something that we can expect to help you further reduce costs either on existing platforms or new platforms?

好的。也許是給 Olav 的，我知道你還沒有正式推出新的矽平台，正如你所看到的——你談到了每個 SKU 價格下降 20% 到 25%，你在路線圖上有什麼工藝技術方面的縮小，可以說是 0.11 或 90 納米，我們可以期望幫助您在現有平台或新平台上進一步降低成本嗎？

There's nothing that we can talk about today in terms of reducing it to 90-nanometer or anything. I think it's pretty logical that over time, you will look at this, we are an engineering and fab company so we have people look at this all the time and it's not just for not starting today only. So will it help us on costs? Absolutely. These reductions when you get over the first hump, maybe the first quarter or two and as you ram in significant production, yes, you should see a benefit at a time when you move from 0.13 to 90 nanometer, as we have experienced when we moved from 0.18 to 0.13. Having said all of this, you know, we haven't made any announcements at this time. We want to remind you of that.

關於將其縮小到 90 納米或其他任何東西，我們今天無話可說。我認為隨著時間的推移，你會看到這個是很合乎邏輯的，我們是一家工程和晶圓廠公司，所以我們讓人們一直在關注這個，這不僅僅是因為今天不開始。那麼它會幫助我們降低成本嗎？絕對地。當您克服第一個高峰時，可能是第一季度或第二季度，當您進入大量生產時，這些減少，是的，當您從 0.13 納米遷移到 90 納米時，您應該會看到好處，正如我們在遷移時所經歷的那樣從 0.18 到 0.13。說了這麼多，你知道，我們目前還沒有發布任何公告。我們想提醒您這一點。

I want to add a little color of that. A good part of our business, it's still one where innovation counts and it's the speed of innovation and bringing out new product cycles as we are doing and adding new features. In general as you said, as you implied you can have the cost reduction cycles. At the moment this market is adding features at such a rate that we are generally focusing much more on the next cycle of innovation, that necessarily focusing on a cost reduction path. We have lots of new technology to integrate in.

我想添加一點顏色。我們業務的一個重要組成部分，它仍然是創新很重要的地方，它是創新的速度，我們正在做的就是推出新的產品週期並添加新功能。總的來說，正如您所說，正如您暗示的那樣，您可以進行成本降低週期。目前，這個市場正在以這樣的速度添加功能，以至於我們通常更多地關注下一個創新周期，這必然會關注降低成本的路徑。我們有很多新技術可以集成。

It's likely having some type of process technology shrink, but, you haven't announced the details yet. Just last question on the personal wireless entertainment, is the Sirius design win is that grouped into that division, or is that still part of the traditional PNP business?

它可能有某種類型的工藝技術縮小，但是，你還沒有公佈細節。關於個人無線娛樂的最後一個問題，Sirius 設計獲勝是屬於該部門，還是仍然是傳統 PNP 業務的一部分？

That really came out of the 2005 efforts, the formation of this business unit came as we transitioned from '05 to '06 and as you said, it could be viewed in sort of either case. What was probably and frankly more important than where it all sits in the business is the learnings we got in being an applications processor, certainly is applicable to that division's work and we've got some -- again that with other significant efforts going on is building, we think, some good internal mention on our own technology capability.

這真的來自 2005 年的努力，這個業務部門的形成是在我們從 05 年過渡到 06 年時成立的，正如你所說，它可以在任何一種情況下看待。坦率地說，比這一切在業務中所處的位置更重要的是我們在成為應用程序處理器時所學到的東西，當然適用於該部門的工作，我們已經得到了一些——同樣，隨著其他重大努力的進行是我們認為，建立一些關於我們自己的技術能力的良好內部提及。

Great, thanks again, guys.

太好了，再次感謝各位。

Thank you.

謝謝你。

We'll take our next question from Adam Benjamin with Jefferies & Company.

我們將向 Jefferies & Company 的 Adam Benjamin 提出下一個問題。

Thanks, guys. Great quarter.

多謝你們。很棒的季度。

Thanks.

謝謝。

With respect to the gross margin, your guidance does seem to indicate or imply about 41% or so coming down from the 46% range. Can you give us any view, is that a shift due to maybe from the 5022 to the 5024?

關於毛利率，您的指導似乎確實表明或暗示從 46% 的範圍下降約 41%。你能給我們任何看法嗎，這可能是因為從 5022 到 5024 的轉變嗎？

There's some -- can you hear me all right, Adam? There's some disturbance there on the audio here.

有一些——你能聽到我的聲音嗎，亞當？這裡的音頻有一些干擾。

Yeah, I can hear you.

是的，我能聽到你的聲音。

Okay. Don't take what I said as a guidance. For any particular part. I would just like to remind you that what our long-term model is and I -- we do not guide to the next quarter's margin. So having said that I mean, is there then another question that is -- anything else that you --

好的。不要把我說的當做指導。對於任何特定的部分。我只想提醒你，我們的長期模型是什麼，我——我們不指導下一季度的利潤率。話雖如此，我的意思是，還有另一個問題是-- 你還有什麼--

Well, I guess what I was trying to get at is it does appear as Q1 comes down to the bottom end of that 41 to 44% range, is that something we can expect to come back up in Q2?

好吧，我想我想知道的是它確實出現在第一季度下降到 41% 到 44% 範圍的底端，這是我們可以期待在第二季度恢復的嗎？

So as I haven't guided to the bottom range or the upper range, you know I can't answer your question, really, and bringing -- just taking -- I constantly remind everyone of the 41 to 44, this is not new. I have done this in the past fourth quarter. We present the 41 to 44% gross margin model everywhere and so it hasn't changed. This is not new. This is consistent with the past. Don't take that as a specific guidance for the first quarter.

因此，由於我沒有引導到最低範圍或上限，你知道我無法回答你的問題，真的，並且帶來 - 只是採取 - 我不斷提醒每個人 41 到 44，這不是新的.我在過去的第四季度已經這樣做了。我們到處展示 41% 到 44% 的毛利率模型，所以它沒有改變。這並不新鮮。這與過去是一致的。不要將其作為第一季度的具體指導。

Back to wireless connectivity I know you have been beating around the bush on this. People have been talking about PNPs having wireless LAN and Bluetooth built in. Can you give us some better view as to what that group could look at?

回到無線連接，我知道你一直在拐彎抹角。人們一直在談論具有內置無線 LAN 和藍牙的 PNP。您能否讓我們更好地了解該組可以查看的內容？

Well, one way of giving it some color on that is actually CES where you have a technology demonstration there, where, for example, we were starting to point towards the capabilities, for example, of Wi-Fi. That is now pervasive enough that you've got hot spots. You have home networks. You have office networks. You've got streaming. But Wi-Fi is prevalent. That that certainly could be a useful addition to a pnp capability.

好吧，給它一些顏色的一種方法實際上是 CES，在那裡你有一個技術演示，例如，我們開始指向功能，例如 Wi-Fi。這現在已經足夠普遍，以至於你已經有了熱點。你有家庭網絡。你有辦公網絡。你有流媒體。但是 Wi-Fi 很普遍。這當然可能是對 pnp 功能的有用補充。

In the area of Bluetooth, we think that's more likely to be signed, for example to work on wireless headsets and frankly, we demonstrated that a year before last at CES So you are right, in that the wireless technologies typically take longer to rollout. They have to have an infrastructure in place. You have to really generate, good insertability, but Wi-Fi, for one, does look an attractive solution, now that we have, you know, access points everywhere, you have got low-cost o r no-cost services. So we feel quite bullish on Wi-Fi.

在藍牙領域，我們認為更有可能簽約，例如用於無線耳機，坦率地說，我們在前一年的 CES 上證明了這一點所以你是對的，因為無線技術通常需要更長的時間才能推出。他們必須有一個基礎設施。您必須真正生成良好的可插入性，但是 Wi-Fi 看起來確實是一個有吸引力的解決方案，因為我們在各處都有接入點，您可以獲得低成本或免費的服務。所以我們非常看好Wi-Fi。

One last question. With respect to the cell phone market, there's -- there has been some debate as to whether the MP3 capability will be run off the base then or there will be a multimedia processor and that would put you in direct competition against a TIs, or others. How are you seeing that market and is that a market you can expect to play in, in maybe late '06 or if not '07/08?

最後一個問題。關於手機市場，關於 MP3 功能是否會在基礎上運行還是會有多媒體處理器存在一些爭論，這將使您與 TI 或其他人直接競爭.您如何看待這個市場？您可以期待在 06 年末或 07/08 年進入這個市場嗎？

You are right, there's various architectures being proposed and emerging in the cell phone space. The simple low cost coprocessor to give you sort of simple polyphonic tones and MP3 playback have gone as the first generation of phones in that they haven't really got -- they haven't got great user acceptance. They are in the phones but that simple co-processor is not one that's particularly attractive to us.

你是對的，在手機領域提出並出現了各種架構。簡單的低成本協處理器為您提供簡單的複音和 MP3 播放，已經成為第一代手機，因為它們還沒有真正得到——它們沒有得到很好的用戶接受。它們在手機中，但那個簡單的協處理器對我們來說並不是特別有吸引力。

But moving forward, though as you describe the co-processor has proved to be a popular business model for adding new multimedia features to the phone. And so that clearly would offer interest to us as we look at focusing really on the features and the battery life and performance as differentiation. So that the co-processor model has proved itself to be popular and that could be a vehicle we could use to bring, you know, high quality, low power multimedia type features to that type of market.

但展望未來，儘管正如您所描述的，協處理器已被證明是一種為手機添加新多媒體功能的流行商業模式。因此，當我們真正關注功能、電池壽命和性能作為差異化時，這顯然會引起我們的興趣。因此，協處理器模型已經證明自己很受歡迎，它可以成為我們可以用來為這類市場帶來高質量、低功耗多媒體類型功能的工具。

Are you currently seeing design activity there?

您目前在那裡看到設計活動嗎？

Well, as we talk about for all of our product lines, we won't be disclosing design wins or customer wins ahead of time. We have been very active with work in that space now for a period of time, but these cycles , typically the wireless space, are more extended than you would have in a traditional market, solidification cycles, working with these platforms, do take longer. So there's nothing that we would announce at this time.

好吧，正如我們談論我們所有的產品線一樣，我們不會提前披露設計勝利或客戶勝利。一段時間以來，我們一直非常積極地在該領域開展工作，但這些週期，通常是無線領域，比在傳統市場中更長，固化週期，與這些平台合作，確實需要更長的時間。因此，我們目前不會宣布任何內容。

All right, great. Thanks a lot.

好的，太好了。非常感謝。

Thank you.

謝謝你。

Sure.

當然。

We'll take our next question from Daniel Ernst with Hudson Square Research.

我們將向哈德遜廣場研究公司的 Daniel Ernst 提出下一個問題。

Yes, good evening. Thank you for taking the call. A couple, if I might. First, Olav your R&D spending, it fell a bit below your 17% target. So will your spending or your hiring in the quarter allow you to catch up to your target during the -- during the first quarter or into the second? And then on your inventory level, being at 10 to 11 days, did you expect to be able to get into your target range over the course of the first quarter as well? And then just last question, on Java ME can you talk about that what that does to margins of a given platform, are you able to pass through the royalty of software costs on top of platform per unit, or do you actually get a little bit of upside on margin on Java and the ME enabled platforms?

是的，晚上好。感謝您接聽電話。一對，如果可以的話。首先，Olav 你的研發支出，略低於你 17% 的目標。那麼，您在本季度的支出或招聘是否會讓您在第一季度或第二季度趕上您的目標？然後在您的庫存水平上，即 10 到 11 天，您是否期望在第一季度也能夠進入您的目標範圍？然後是最後一個問題，關於 Java ME，您能否談談這對給定平台的利潤有什麼影響，您是否能夠在每單位平台上通過軟件成本的版稅，或者您是否真的得到一點Java 和支持 ME 的平台的利潤空間有多大？

All right, the answer to the first two, it's simple, it's both yes. So even though R&D was below the 17%, we have increased it significantly as you see quarter over quarter and as revenue increased, even faster, we're below the 17%, but slightly, right, 16.3%. We are targeting and we keep targeting that is building to our very flexible spending model of 17% R&D and the guidance that we have given is very clearly We are again hiring about $13 million of R&D for the first quarter. We will be hiring. We will be successful as we were in the last quarter. I have no doubt that we can attract very talented engineers to our group, with our new divisions. We have a lot of -- you know with have a lot to sell here to these people. They are very interested in what we are doing. I have no doubt that we -- we can be a successful R&D spending company in Q1, within the target model. Inventory, 10 to 11 days that's kind of like what you have seen in the past. And, you know, when you calculate the inventory days you get a balance sheet snapshot.

好吧，前兩個的答案，很簡單，都是肯定的。因此，儘管研發低於 17%，但正如您所看到的，我們已經顯著增加了季度環比，並且隨著收入的增長甚至更快，我們低於 17%，但略低於 16.3%。我們的目標是建立我們非常靈活的 17% 研發支出模式，我們給出的指導非常明確，我們將在第一季度再次招聘約 1300 萬美元的研發人員。我們將招聘。我們將像上個季度一樣取得成功。我毫不懷疑，我們可以通過我們的新部門吸引非常有才華的工程師加入我們的團隊。我們有很多——你知道有很多東西要賣給這些人。他們對我們正在做的事情非常感興趣。我毫不懷疑，在目標模型內，我們可以在第一季度成為一家成功的研發支出公司。庫存，10 到 11 天，這有點像你過去看到的。而且，您知道，當您計算庫存天數時，您會得到資產負債表快照。

You don't see what we have during a quarter and when we have the high level of activity that certainly looks at the balance sheet. With doe have a 30-day goal. I would like to remind you, it's not just us holding inventory we have a powerful supply chain with our intermediaries. It is very easy for us to pull inventory out of the supply chain. We don't have to have it on the balance sheet. I'm very happy with the 10 to 11 days. I would like to see a little more inventory, but a balance sheet snap -- but balance sheet snapshot, during the quarter might be different things sometimes. So I have no concern about our inventory level whatsoever. I will pass it on to Gary on your Java question.

您看不到我們在一個季度內以及當我們有高水平的活動時，肯定會看到資產負債表。確實有一個 30 天的目標。我想提醒你，不僅僅是我們持有庫存，我們還有一個強大的供應鍊和我們的中間商。我們很容易將庫存從供應鏈中提取出來。我們不必把它放在資產負債表上。我對這 10 到 11 天感到非常滿意。我希望看到更多庫存，但資產負債表快照 - 但資產負債表快照，在本季度有時可能會有所不同。所以我一點也不擔心我們的庫存水平。我將就您的 Java 問題將其傳遞給 Gary。

Yeah, on the Java question, as with any of the new technologies that we are adding, for example, at CS, we were able to show the addition of things like gaming, the video, and of other advanced features. They generally offer us an opportunity, as you point out to do an upsale in terms of ASP price points. Not always the case but sometimes strategically we don't necessarily do that. For example in video, we purposefully have what we call a -- one part of our strategy is what we call video-for-free and C.S we showed MPEG 4 on our existing chip set and make video part of the main stream for that market for a zero uplift. But you're right in, general, when there's other licensed software we do aim to have an ASP uplift.

是的，關於 Java 問題，就像我們添加的任何新技術一樣，例如，在 CS 中，我們能夠展示添加的內容，例如游戲、視頻和其他高級功能。它們通常為我們提供了一個機會，正如您指出的那樣，可以根據 ASP 價格點進行追加銷售。並非總是如此，但有時在戰略上我們不一定要這樣做。例如，在視頻方面，我們有目的地制定了我們所說的——我們戰略的一部分是我們所謂的免費視頻，而 C.S 我們在現有芯片組上展示了 MPEG 4，並使視頻成為該市場主流的一部分零提升。但你說得對，一般來說，當有其他許可軟件時，我們確實旨在提升 ASP。

Do you expect to be able to generate some wins on the Java enabled platform during the year?

您是否期望在這一年能夠在支持 Java 的平台上取得一些勝利？

Well, the -- we wouldn't have been -- we wouldn't have made that investment and shown it at C.S, if we thought it was a zero sum game. We have significant interest from different times of customers that are interested in that. Again, it's -- it's preannounced design wins but it is an important technology and one that actually can be applied, you know across different segments of our product divisions, as you think about it. So we think Java is an important extension technology for us, as well as we'll hope we turn into additional business this year.

好吧，如果我們認為這是一場零和遊戲，我們就不會進行這項投資並在 C.S 展示它。我們對不同時期對此感興趣的客戶產生了濃厚的興趣。同樣，它是預先宣布的設計勝利，但它是一項重要的技術，並且實際上可以應用，你知道我們產品部門的不同部分，正如你所想的那樣。所以我們認為Java對我們來說是一個重要的擴展技術，我們也希望今年我們能變成額外的業務。

Great. Thanks, Gary and thanks Olav. Look forward to seeing more of this.

偉大的。謝謝，加里，謝謝奧拉夫。期待看到更多這樣的內容。

And we'll take our next question from Craig Berger with Wedbush Morgan.

我們將回答 Craig Berger 和 Wedbush Morgan 的下一個問題。

Good afternoon, gentlemen and nice job on the execution.

下午好，先生們，執行工作做得很好。

Thank you.

謝謝你。

A couple questions. One, on the -- on your relationship with your manufacturing partner, are there any plans to change that? In the foreseeable future or do all things remain rosy on that front?

幾個問題。第一，關於您與製造合作夥伴的關係，是否有計劃改變這種情況？在可預見的未來，還是在這方面一切都保持樂觀？

Well, the -- I would say all things remain rosy. We enjoy I think very positive relationships, as you would expect in a growing business. I think the vector is clearly in the right direction for everyone as part of the bigger economy here. So in general, I think we're very happy with both intermediaries we used. So, no immediate changes on the horizon.

好吧，我會說所有事情都是美好的。我們喜歡我認為非常積極的關係，正如您在成長中的業務中所期望的那樣。作為這裡更大經濟的一部分，我認為對於每個人來說，這個向量顯然都是正確的方向。所以總的來說，我認為我們對我們使用的兩個中介都很滿意。因此，不會立即發生變化。

Okay.

好的。

And good relationships with all.

並與所有人保持良好的關係。

Have any of your customers complained about margins stacking or driving costs down further or it's not an issue at this point?

您是否有任何客戶抱怨利潤堆積或進一步降低成本，或者目前這不是問題？

Our customers constantly complain about pricing, and it's part of their pricing negotiation discussion we typically have two or three times a year. Nothing that's out of the ordinary. Of course, customers find various reasons to complain about pricing, but as I said, we've had a very consistent 41 to 44% model that we've been working towards. We bring a great deal of value to our customers solutions, so -- but, of course, customers find any reason to complain, but our 41 to 44% puts us in a good balance, and the right sweet spot we think with the value to our biggest customers.

我們的客戶經常抱怨定價，這是他們定價談判討論的一部分，我們通常一年進行兩到三次。沒有什麼不尋常的。當然，客戶會找到各種理由抱怨定價，但正如我所說，我們一直在努力建立一個非常一致的 41% 到 44% 的模型。我們為客戶的解決方案帶來了巨大的價值，所以——當然，客戶會找到任何抱怨的理由，但我們的 41% 到 44% 讓我們處於良好的平衡狀態，以及我們認為價值的正確最佳點給我們最大的客戶。

Okay. With respect to the depressive engagement, can you talk about the competitive situation there? Who else do you know of is gunning for those sockets and potentially, do you know if they are as far along in their software development efforts as you are or whether or not your head start was exclusive with Microsoft?

好的。關於抑鬱的參與，你能談談那裡的競爭情況嗎？你知道還有誰在爭奪這些套接字，你是否知道他們在軟件開發方面的努力是否和你一樣遠，或者你的領先優勢是否是微軟獨有的？

We believe we have a very significant head start. We haven't seen other folks talking about this type of solution in the market. So we do -- I think we do characterize it as having a significant lead in the market. Part of that, frankly, comes in developing this -- working very closely with Microsoft, there was an enormous amount of work that went into this for the second half of '05. We do expect to see competitors emerge, but at the moment, from certainly the very strong response we are getting from the -- the notebook OEM and ODMs, I think we have an opportunity to establish a real foothold here in the market as we go.

我們相信我們有一個非常重要的開端。我們還沒有看到其他人在市場上談論這種類型的解決方案。所以我們這樣做 - 我認為我們確實將其描述為在市場上具有顯著領先地位。坦率地說，其中一部分來自於開發這個——與微軟密切合作，在 05 年下半年投入了大量的工作。我們確實希望看到競爭對手的出現，但目前，從我們從筆記本 OEM 和 ODM 那裡得到的非常強烈的反應來看，我認為我們有機會在市場上建立真正的立足點。 .

Is there a market share in that market that you would be happy with?

在該市場中是否有您滿意的市場份額？

Well, of course, I would like a very large market share there, but, no, we are not going to make a public prediction of market share for this type of segment. We -- we have been very fortunate working with leaders in the personal media class space and we have advantage in personal media displays and we hope to turn that into a long term relationship. To your point, we are playing this for long term, we think that '06 will give us really good momentum, but we really have to build and really keep our eye focused on the potential market of 16 million and 48 million units in the subsequent years. So time will tell, but we have a fresh move to start.

好吧，當然，我希望那裡有很大的市場份額，但是，不，我們不會公開預測這類細分市場的市場份額。我們 - 我們很幸運能與個人媒體課程領域的領導者合作，我們在個人媒體展示方面具有優勢，我們希望將其轉變為長期合作關係。就你的觀點而言，我們是長期玩這個的，我們認為 06 年會給我們帶來非常好的動力，但我們確實必須建立並真正將注意力集中在隨後的 1600 萬和 4800 萬台的潛在市場上年。所以時間會證明一切，但我們有一個新的開始。

One more and then I will drop off. Can you give us maybe who are your top two competitors in that market segment?

再來一個，然後我就下車了。您能告訴我們誰是您在該細分市場中的前兩大競爭對手嗎？

Again, they are not -- there are no names that are being expressed to us in that segment as yet.

同樣，它們不是 - 在該部分中還沒有向我們表達的名稱。

Okay.

好的。

Again --

再次 -

Thank you.

謝謝你。

We'll take our next question from Shawn Slayton with SG Cowen.

我們將向 SG Cowen 的 Shawn Slayton 提出下一個問題。

Good afternoon. When does OpEx cease to become a fixed percentage of sales for PortalPlayer? And I ask this, you know, because of the universe of fab companies so much of the earnings growth is derived from leverage off ever operating expenses.

下午好。 OpEx 何時不再成為 PortalPlayer 銷售額的固定百分比？我問這個，你知道，因為晶圓廠公司的世界，所以大部分的盈利增長來自於以往運營費用的槓桿作用。

Well, not in the foreseeable future. And when I say that, I don't plan to change the model over the next couple of quarters, but yes, you have a point. If at some point this becomes a huge revenue company -- and I'm not pointing to this, I'm just theoretically discussing -- I'm pretty sure at some point in time you will see the leverage. And especially on our SG&A side you will see some leverage, with 24% target model will not be 24 or 22 or something below. But I think it's too early to discuss at the time. We're fast ramping in not just one division anymore. We have like, two interesting divisions now. We are targeting business and customer diversification which is very important for us and for our investors, investors with the successful launch of our PMD division, the personal media division, and the wireless is our next step. So we have good incentive to keep spending at a certain level and limit it to that level so that you guys have an opportunity to look at our financials for the future and to model us for 2006. I give you the point that at some time later, develop to maybe look at that model again, but not for the foreseeable future.

好吧，在可預見的將來不會。當我這麼說的時候，我不打算在接下來的幾個季度裡改變模型，但是是的，你說得有道理。如果在某個時候這成為一家收入巨大的公司——我不是在指出這一點，我只是在理論上討論——我很確定在某個時間點你會看到槓桿作用。尤其是在我們的 SG&A 方面，您會看到一些影響力，24% 的目標模型不會是 24 或 22 或更低。但我認為當時討論還為時過早。我們不再只在一個部門快速發展。我們現在有兩個有趣的部門。我們的目標是業務和客戶多元化，這對我們和我們的投資者來說非常重要，我們的 PMD 部門、個人媒體部門和無線的成功推出是我們的下一步。因此，我們有很好的動力將支出保持在一定水平並將其限制在該水平，以便你們有機會查看我們未來的財務狀況並為 2006 年建模。我會在稍後的某個時間告訴你們，發展到也許再看那個模型，但不是在可預見的將來。

Okay. That's helpful. Thank you. And for Gary, you know -- considering your extensive experience within the MP3 player industry, can you help us understand the significance -- relative underperformance of higher capacity window-based MP3 players as compared to the obvious alternative? I mean this camp is certainly a very large opportunity for PortalPlayer, and when does it take off in your estimation?

好的。這很有幫助。謝謝你。對於 Gary，您知道 - 考慮到您在 MP3 播放器行業的豐富經驗，您能否幫助我們理解其重要性 - 與明顯的替代方案相比，基於窗口的大容量 MP3 播放器的性能相對較差？我的意思是這個陣營對於 PortalPlayer 來說無疑是一個非常大的機會，你估計它什麼時候起飛？

Well, the -- I'm not sure I have any particular insight other than it's obvious in the market. The present market leader is just firing on all cylinders across a broad range of strengths in both services and content and devices. They are doing everything right.

好吧，我不確定我是否有任何特別的見解，除了在市場上很明顯。目前的市場領導者正在全力以赴，在服務、內容和設備方面擁有廣泛的優勢。他們做的一切都是正確的。

So I -- for the other camp, is it an asset or marketing dollars or features? What will get that other camp moving?

所以我 - 對於另一個陣營，它是資產還是營銷資金或功能？什麼會讓另一個陣營動起來？

I think to get the other camp moving, it is -- there's going to have to be a maturity in the technology. The technology has progressed over the last two generations. That needs to be, I think, a shift maybe in the type of business model in the way that the people want to enjoy content. The model from Microsoft starts to really focus in more on a subscription type of model, a more adaptable purchase or view for 30 days or enjoy for 30 days model. And so really, I think it may come down to, do people -- well a segment of the population latch on to subscription services. And without that, you are right, the difference becomes very unclear.

我認為要讓另一個陣營動起來，那就是——技術必須成熟。該技術在過去兩代中取得了進步。我認為，這需要改變商業模式的類型，讓人們希望享受內容。微軟的模式開始真正專注於訂閱類型的模式，更具適應性的購買或觀看 30 天或享受 30 天的模式。所以真的，我認為這可能歸結為人們 - 有一部分人喜歡訂閱服務。沒有它，你是對的，差異變得非常不清楚。

Okay. Thanks guys, I appreciate it.

好的。謝謝各位，我很感激。

Thanks.

謝謝。

We'll go next to Jason Paraschac with Kaufman Brothers.

我們將與 Kaufman Brothers 一起前往 Jason Paraschac。

Hopefully two quick questions. One on the Preface product, that it's based on the 5024 platform. Going forward if you try to diversify, should we expect these other product verticals that you need to be also based on the same chip platform that you are using in your core market?

希望有兩個快速的問題。 Preface 產品中的一個，它基於 5024 平台。展望未來，如果您嘗試多樣化，我們是否應該期望您需要的這些其他垂直產品也基於您在核心市場中使用的相同芯片平台？

Not necessarily. We took an opportunity for speed and also the actual factor that the display drove -- display lid drove, which is a small physical size. 5024 was a perfect fit. But to your point in other verticals, we will develop specific leading edge solutions for those verticals, but again, if we can leverage the technology and maintain the chip technology, it's a great ROI for us. So the answer is, that was probably an example of good adoption technology across the space. In general, as you know, we have previously discussed having three development teams and we certainly have the ability to develop specialized silicon for different market opportunities.

不必要。我們抓住了速度的機會，也考慮了顯示器驅動的實際因素——顯示器蓋驅動，這是一個很小的物理尺寸。 5024 非常適合。但就您在其他垂直領域的觀點而言，我們將為這些垂直領域開發特定的領先解決方案，但同樣，如果我們能夠利用該技術並保持芯片技術，這對我們來說是一個很好的投資回報率。所以答案是，這可能是整個空間採用良好技術的一個例子。總的來說，如您所知，我們之前討論過擁有三個開發團隊，我們當然有能力為不同的市場機會開發專用芯片。

Okay. And then you talked about the feature rich MP3 market in terms of the unit volumes. I'm curious if you looked to see how that will evolve this year. How much of that market could be addressed with the capabilities of the 5022 product today?

好的。然後你談到了在單位數量方面功能豐富的 MP3 市場。我很好奇你是否想看看今年它將如何發展。當今 5022 產品的功能可以解決多少市場？

Certainly with the addition recently of the from CES, the capability of video, as you looked into '06, we think a lion's share of that market is available to that class of product. It really does address the audio, the photo, the video, and the gaming capabilities. So I think a lion's share of that market is developed for that class of product.

當然，隨著最近來自 CES 的視頻功能的增加，正如您在 06 年所看到的那樣，我們認為該市場的最大份額可用於此類產品。它確實解決了音頻、照片、視頻和遊戲功能。所以我認為該市場的最大份額是為這類產品開發的。

And the video spec on the 5022 that you were showing, I mean it was a little reduced from what's out there in the market. But you know, do you think that is enough at least this year to -- you know, most of the market out there?

還有你展示的 5022 的視頻規格，我的意思是它比市場上的產品有所減少。但是你知道，你認為至少今年就足夠了——你知道，大部分市場都在嗎？

Well, certainly the feedback that we got from our customers was not quite as negative as you first sort of posed it there? I didn't mean it to be negative.

好吧，當然，我們從客戶那裡得到的反饋並不像你第一次在那裡提出的那麼負面？我並不是說它是消極的。

No, that's fine. The example on the key metric that everyone, I think was impressed with was the 30 frames per second MPEG 4 functionality on the smaller screen. That technology, i.e. video for free, will not be on the larger display devices but for the main stream devices where the cost of the display is paramount, we think that could be a very compelling solution and again, it's hard to beat free.

不，沒關係。我認為每個人都印象深刻的關鍵指標的例子是小屏幕上每秒 30 幀的 MPEG 4 功能。這項技術，即免費視頻，不會出現在更大的顯示設備上，但對於顯示成本至關重要的主流設備，我們認為這可能是一個非常引人注目的解決方案，而且再一次，它很難被免費擊敗。

Great. Great quarter, guys. Thanks.

偉大的。偉大的季度，伙計們。謝謝。

Thanks a lot. Well, operator?

非常感謝。那麼，運營商？

That concludes our question-and-answers sir. I would like to turn it back to you for closing remarks.

先生，我們的問答到此結束。我想把它轉回給你做結束語。

Thank you very much for joining us today. We plan to meet with investors on February 8th in San Francisco at the Thomas Weisel Partners Technology Conference. We look forward to seeing many of you there, and with that, we'll conclude this conference call. Thank you.

非常感謝您今天加入我們。我們計劃於 2 月 8 日在舊金山的 Thomas Weisel Partners 技術會議上與投資者會面。我們期待在那裡見到你們中的許多人，我們將結束這次電話會議。謝謝你。

Once again that does conclude today's conference. Thank you for your participation. You may disconnect at this time.

這再次結束了今天的會議。感謝您的參與。此時您可以斷開連接。