Ehud Gelblum, Managing Director and Head of US Tech Research, Citi.
Thank you, right. Okay, that’s very helpful. Is there update for the subscriber number.
John Chen
I’m sorry.
Ehud Gelblum
Is there a subscriber number update that we can hang our hat on?
John Chen
No, not right now.
Ehud Gelblum
Okay, thank you.
John Chen
Thank you.
Operator
We’ll go next to Simona Jankowski with Goldman Sachs.
Simona Jankowski, Senior Equity Research Analyst, Global Investment Research, Goldman Sachs
Hi, thank you. I just wanted to…
John Chen
Hi Simona.
Simona Jankowski
Hi, I just wanted to clarify something at first. I think you said in the press release and in the remarks that you expect P&L break-even at some point in fiscal 16. I think earlier you were talking about break-even or positive EPS for the whole fiscal 16. So just wanted to clarify that first.
John Chen
No, I meant — if I have said it, I apologize. That was just a little ahead of my own reading. Sometime in FY16 we will turn profitable. Our plan is once we turn profitable we’ll sustain it.
And so that was all.
And I didn’t really have a model with me. I don’t have any. I didn’t give any guidance of the entire FY16.
But Simona, I think I hope you know that this management team are very focused on making the bottom line. Last quarter we lost only couple of pennies a share, this quarter we made one.
I don’t think anybody should model that we are all of a sudden have these strong expenses that go off track. I don’t intend to be there. I can’t promise you that, but it is our intent to get to sustainable profitability as quickly as we can.
If for some reason that we were able to do it sooner. in the year. then of course you add everything together, than in FY16 we will be profitable. And that will be music to my ears. I at least committed to everybody that I’ll work hard at it, but I can’t make that promise.
Simona Jankowski
And then just the couple of question around the Classic. So you said that the purchase commitments were up quite a bit. Can you just clarify the Classic is manufactured with FoxConn and is it still on a variable cost model like what you had negotiated earlier or is there any kind of fixed element before these purchase commitments have to happen regardless of the sell-through of the product?
John Chen
No, it is on the same, exactly the same model, the manufacturing model, the cost model the variable cost model where we talked about. And yes, Classic is being manufactured by FoxConn.
Simona Jankowski
And then just lastly. You are guiding for an acceleration in the declines next quarter of the Service Access Fees. And presumably that’s accounting for an accelerated hardware conversion to the Classic. Can you just talk a little bit about what assumption is embedded there?
John Chen
Well you already said it. I mean we actually seen a 13%, and that’s probably a reasonably good rate, some balance between 12% to 13%. We’re just being conservative and add a couple of two three points more to it. We think that’s reasonable, as the Classic goes into the market.
