Tim Luke Softness Quotations

We had lowered our estimates last week and some softness had been widely expected, however, a new sales range with a mid point of -12.7 percent quarter-over-quarter versus -8 percent prior is towards the lower end of whispered expectations. While valuation (20x new CY06) may offer some support given the absence of guidance on inventory levels, which we believe are likely to have moved materially higher at Intel, and given ongoing uncertainty on the gross margins outlook, we would retain our cautious stance at current levels.

These results add to a long list of negative data points in wireless that have emerged in recent days, further confirming widespread softness in wireless.