Akash Palkhiwala : Yes, so as you’ll recall, Mike, we had said earlier that we expect the third quarter to be the low quarter from a financial perspective, just given the seasonality of our business. That still holds true, so as we go from third to fourth quarter and then into fiscal first quarter, which is the December quarter, and then into fiscal first quarter, which is the December quarter, we expect growth as new launches of phones happen across all major OEMs. And as I said earlier, we’re going to have the launch of our Snapdragon 8 Gen 4 chip as well. And we’re extremely excited about what that chip does and the launches that will come through that chip later in the year. Specifically, as you think about fourth quarter, we expect the EPS growth from third to fourth quarter to be consistent with fiscal ‘23. And then we’ll grow beyond that into the December quarter.
Mike Walkley: Great. That’s very helpful. Maybe just for a quick follow up on the IoT business, it sounds like March is the bottom as you laid out. Can you maybe update us on the three segments, just what you’re seeing in terms of the inventory correction?
Akash Palkhiwala : Yes, so Mike, we talked about December fiscal first quarter as the bottom quarter. We grew from that into March by 9% sequential growth, which was better than our expectations. And then now we’re guiding low to mid-single digit growth into the September quarter. So as we’d outlined at the beginning of the year, we would see improvement through the year. And that trend is holding, and we expect it to hold in the fourth fiscal quarter as well. In terms of different parts within IoT, consumer is more aligned with phones. So we’ve seen that recover faster. And then the industrial networking is consistent with what our peers are seeing within those industries. And the recovery timeline is aligned with that. If you kind of step back and think about our business there, we’re pretty excited about new products that are coming out.
So Cristiano talked about the PC set of products coming out later this year. Device launch coming out later this year. But then in addition to that, we also have new products in industrial and Wi-Fi 7 that will drive growth into this IoT segment as well.
Operator: Our next question comes from Stacy Rasgon from Bernstein Research.
Stacy Rasgon: Hi, guys. Thanks for taking my questions. For my first question, just on the PC outlook, it does sound like devices are going to be available for purchase in the back half. So like how much PC is actually in the Q3 outlook, and what should we expect for the PC in the numbers like into the second half and beyond? Like when does the PC actually get big enough for us to see it?
Cristiano Amon: Hey, Stacey. Thanks for the question. We have a lot of product momentum right now, and especially with all the launches. I would encourage everybody to go watch the Microsoft Build event, especially what is happening with on-device AI. There’s a lot of product momentum and launches. As those devices start ramping up in volume, and since a lot of them are going to be back to school, it’s going to be more of a fiscal ‘25 event in terms of being material within the IoT segment. Anything you’d like to add, Akash?
Akash Palkhiwala : Just maybe in our June quarter guidance, there isn’t material PC volume forecasted in our numbers.
Cristiano Amon: One thing we’re going to do, sorry, just real quick. One thing we’re going to do, like we provide an update on auto this quarter, we’re going to provide a more detailed update next quarter on PC, especially as we’re going to have those devices out launched.
Stacy Rasgon: That’s helpful. For my follow up, I wanted to ask about Huawei revenue. So in the Q, it says that you’re not expecting any further product revenue from Huawei beyond the end of the calendar year. So I know it’s only low end 4G that’s left, like but how big is that now in the numbers, and how much of that will be going away into the calendar year?
Akash Palkhiwala : Yes, so Stacy, if you look at Huawei, as you’ve seen, they’ve launched multiple tiers of 5G devices already with their own chips. And clearly, we don’t participate in those devices. What we’re shipping at this point is the license that we have is for 4G chips. And as you rightly pointed out, it’s at the low end of the spectrum. What we outlined in the Q is, since the devices will eventually transition all to 5G, we don’t expect any revenue from Huawei product business in ‘25.
Operator: Our next question comes from the line of Chris Caso with Wolfe Research.
Chris Caso: Yes, thank you. Good afternoon. A question is on QTL. And it sounds like that you’re starting to see some degree of improvement, particularly among the China OEMs in the QCT business. But that thus far hasn’t translated to the QTL business. Can you talk about sort of the lag between the recovery in those segments, and what your level of optimism or not is for sort of breaking out of this range in QTL business?
Akash Palkhiwala : Yes, so as well, QTL business is really driven by the size of the market, and there is a cap on the total ASPs up to which the royalty rates, the percent royalty rate applies. So, as we’ve seen the benefit on the QCT side is a lot driven by more units at the premium especially above $400 in price. It does not, it’s not something that benefits the QTL business directly the way the royalty program is structured. So that’s the disconnect between the two.
Chris Caso: Got it. That’s helpful. As a follow-up, with regard to the AI handsets, a lot of the questions that we receive on this is, sort of why and what are the applications, what are the reasons for a consumer to upgrade their handsets to AI? Cristiano, you talked about the developer hub that you’re running, perhaps that gives you some insight into what the developers are doing, what’s going on in the pipeline that will drive these AI handsets out.
Cristiano Amon: Look, it’s a great question, and I want to step back and say, in general, I think AI is going to benefit all the devices. I think AI, when it extends to running on device, besides the benefit of working alongside the cloud, it has completely new use cases, privacy, security, latency, cost, personalization, et cetera. Here’s how you should look into this. In the same way that when the smartphone started, you have a handful of apps that eventually grew to thousands and hundreds of thousands of apps, and that was really the user experience. I think we’re in the very early stage, and you’re starting to see some of those use cases, and you have exactly that moment. Some of the phones have 10 apps, and they’re growing.
