Chuck Whitten: Yes. Tim, there’s a lot in there. Let me start to unpack it and we’ll probably double or triple team this one. So look, obviously, it’s a challenging PC market backdrop. So maybe I’ll just start with our current internal estimates for this year, which I think we shared on our last Q2 call of sort of 280 million to 290 million industry units. That’s still our estimate as we go into Q4. And that implies sort of a mid double-digit decline in units year-over-year. And I think that would be the single largest percentage decline in recent history. You’d have to go back to 2015 to see something sharper. So, that’s the reality of the backdrop today. And as I highlighted, commercial is holding up better than consumer, and that’s clearly consistent with long-term industry trends.
Commercial PCs, excluding Chrome, tend to be the more durable portion of the market, along with premium consumer and gaming, and that’s where we’ve been focused. And so that’s the dynamic that we see right now. As expected in that environment, from what we’ve seen, channel inventories remain elevated. We see promotional activity to sort of move units through distribution in particular. And as I said, customers are sort of waiting for — to purchase for their immediate needs in this environment. In terms of pricing, you mentioned ASPs. Look, pricing has remained relatively stable across our businesses. If I stay on PCs for a moment, there’s a number of factors. Clearly, in this demand environment, we’ve seen a more competitive pricing environment.
Consumer was the first clearly to see that pressure a couple of quarters ago, and it remains very competitive, and we saw the pricing environment get even more aggressive as the quarter progressed. I would call commercial also as very, very competitive right now given the slowdown we were describing. We’ve seen more aggressive pricing, particularly in the largest accounts as the quarter progressed. And so, that’s the backdrop, as you can imagine, from a supply chain standpoint, supply and demand are — where they were out of balance last year, we’re now on more standard lead times across the portfolio, and we’re really in a position where what we sell is what we ship in any given quarter, and that’s the dynamic in CSG.
Operator: We’ll take our next question from Samik Chatterjee with JP Morgan. Please go ahead.
Samik Chatterjee: I guess if I can just talk about the sort of initial thoughts that you provided on fiscal €˜24 and understand some of the challenges and headwinds on the top line. But, maybe if you can talk about what you’re thinking in terms of the sustainability of the gross margin, particularly I’m assuming some of the mix impact carries over on ISG versus CSG. And you’ve had a couple of quarters of sequential decline in OpEx here. But, as you sort of look forward, how are you trying to align your cost structure to that sort of demand environment that you’re thinking of? And sort of what are the puts and takes when we think about the rest of the P&L in fiscal €˜24?
Tom Sweet: Yes. Hey Samik, So look, I don’t want to get into talking through every line item. I mean, we gave you some early thinking just so you guys sort of think your way through what the P&L dynamics at a top line might look like. I’d highlight a couple of things though, right? So first, as it relates to gross margin stability and our OpEx, look, we’ll work our way through what margin dynamics will look like. We do expect right now that component costs are deflationary in the first half of next year with what we know today. We do think that the back half potentially may change just given some of the supply-demand balances that are out there as we work our way through the year. Obviously, in a declining demand environment, if there is a little bit of ASP pressure, which we would expect that we might see next year.
