James Goss: I’d like to talk a little more about the music in cars idea. Also, did I understand it correctly that you had some OTA updates to enable usage on some devices with new technologies? And if so, how much of that is possible? How prevalent is it? And how do you benefit economically?
Kevin Yeaman: Yes. So what you picked up on, Jim, is that the Zeekr announcement. They have told their customers that they’re — they’ll get their Dolby Atmos update by an over-the-air update. So yes, clearly, they have — that requires you to have the right hardware requirements and everything to be able to do that. And the economic model is no different for us. We’re still — we still charge per device in this case per car. So that’s no different. But what’s exciting about it is that it means — it provides a way to enable more cars for — to the extent that there are cars on the road that have the base capabilities to receive it that — so in that respect expands the addressable market.
James Goss: So it primarily involves electric vehicles or — and not many of the other types, even if they are high-tech type cars?
Kevin Yeaman: Well, in this case, it’s an electric vehicle. I mean there are many vehicles that can receive over-the-air updates for the entertainment system in our case or other aspects of it. Increasingly, that’s becoming the case. But I mean the big news here is that we have another OEM win and that they’re going to be introducing into the car that has a price point under $30,000. And I think — and you’re right, it is significant that our partners are increasingly across many of our device categories. If they have the base hardware requirements, it is in some cases possible to bring Dolby Atmos and Dolby Vision to consumers via over-the-air update.
James Goss: Okay. Maybe one other one. You’ve been very good at pursuing increased penetration for Atmos and Vision in rolling out additional SKUs in various devices. At what point does it shift in your — do they shift in your mind to foundational technologies rather than the growth technologies? How do you look at that sort of thing as you roll through the cycles?
Kevin Yeaman: Yes. Look, the spirit of the foundational compared to Atmos, Vision and imaging patents was to help you and the investment community understand how to think about the macro environment. And so our foundational offerings which are both our audio patents and our branded audio codecs, those enjoy such penetration — such significant penetration against such a broad range of devices that what happens in the macro in terms of consumer spending or more specifically, how many devices are shipped during a quarter is going to be a big factor on what happens with foundational revenues. Whereas we’ve been talking a lot today about Dolby Atmos and Dolby Vision even in TVs, in the living room, where we have our highest penetration of Dolby Atmos and Dolby Vision, we still have a lot of devices to pursue.
And then automotive, as we just talked about, it’s still pretty early days. And for mobile, we have pretty good penetration of Dolby Atmos and a significant opportunity to continue to extend our presence based on our early wins in Dolby Vision and Dolby Vision Capture. And so, obviously, across the board, the macroeconomic, how many devices being purchased affect us but for Atmos and Vision, it really is more about getting on more of the devices that are shipping. And — we said that we think we can grow that significantly in the midterm. We believe we can get to a 15% to 25% CAGR over the midterm. And so still plenty of room to grow. So I’m not thinking about yet when it’s going to shift to foundational.
Operator: There are no further questions at this time. I will turn the call to Peter for closing remarks.
Peter Goldmacher: Okay, great. Everyone, thanks for dialing in on our call today and we’ll talk to you next quarter. Operator, thank you.
Operator: Thank you. This concludes today’s conference call. We thank you for joining. You may now disconnect your lines.
