Mike Walkley : Great. Cristiano, I just want to talk about the Snapdragon for Gen 2 that you talked about. How is the initial uptick in terms of Android demand from your customers looking at that? And do you think, given the supply-demand imbalance that you’ll be able to now make gain share in 2024 as you move downstream on Android?
Cristiano Amon: Mike, thanks for the question. So let me just start with the Snapdragon 4 Gen 2. What we like about it is it insource, the market needs to drive now the next wave of 4G to 5G migration. Just as an example, Xiaomi just recently launched the Redmi 12 5G smartphone yesterday in India at an ASP at USD 135. So we’re very encouraged with now the ability to create this 4G to 5G migration. I think there are a number of markets now that are deploying 5G and developing economies. And as you pointed out, now we don’t have supply constraint anymore at the last year. And our new product road map, we’re encouraged about the ability to drive that 4G to 5G migration at those price points.
Mike Walkley : Just a quick follow-up, just on the IoT business. Can you give us just an update on the 3 segments or any of the segments doing better than others in terms of the inventory believe or the outlook that you provided?
Akash Palkhiwala : Sure, Mike. So this is Akash. I’ll start and maybe Cristiano can add on top of it. So in the short term, the IT business is seeing some of the same dynamics as you’re seeing come through with our peers from a demand side and what the impact it has on the inventory — channel inventory. When we saw the initial weakness, it started with consumer, but we did see it go across to other parts of IoT as well, especially within China. But we’re pretty happy with the results we had in the June quarter. We are up approximately 7% on revenue. And it was really growth across industrial and consumer that drove that benefit. Difficult to kind of predict the timing of recovery and the inventory drawdown. We did say that it would be a factor through the end of the calendar year. But that’s the framework for the very short term on IoT side.
Cristiano Amon: Maybe the only thing I was going to add, Mike, as we indicated multiple times, there’s a lot of things in our IoT segment. And there are some of those things that they have yet to materialize. I think we talk about our PC space, which we’re excited about the new product we have been developing with our custom CPUs. We’re still in the beginning of virtual reality. We’re encouraged by now other players entering the market, which will ignite develop our ecosystem. And I think lastly, on networking. We like the WiFi 7 design win pipeline that could materialize in a new cycle into the future. So as we outlined, there’s a number of different things within that segment.
Operator: The next question is from the line of Stacy Rasgon with Bernstein Research.
Stacy Rasgon : Hello. Sorry about that. I wanted to ask about tip gross margins. They seemed reasonably strong in the quarter even with revenues down. They seemed like maybe they were implied up a bit sequentially the guide seems pretty stable into September. Can you give us any feeling for drivers of the margin pricing mix? You talked about some additional cost dynamics. I don’t know if there’s anything in there on the cost of goods side. some of the dynamics there? And how should we expect that to evolve? Is it just mix that drives it going forward? Are there other things that we should think about?
Akash Palkhiwala : Sure, Stacy. It’s Akash. Yes, we did come in a little bit better than forecasted for the September quarter, and it was really primarily driven by a mix of products. we’re guiding approximately flat margins going into September from June. And that’s a reasonable way of forecasting our margins going forward as well. So we expect to be in the range as we go forward.
Stacy Rasgon : If I could ask one more briefly. Cristiano, you’re talking a lot about AI and how that’s going to contribute. How does AI actually contribute to the model going forward? Like are you anticipating that venture drives an upgrade cycle? Or is it more content? Or is it ASPs for the chips fall less than they would otherwise? Like how do we think about how that actually drives the model as adoption happens?
Cristiano Amon: Very good. Thanks for the question, Stacy. Look, I think I will unpack the answer to the question. And first of all, we’re very confident of what we see happening at the edge. On device, I think there’s a number of reasons AI is developing on devices, a little bit different in the cloud. Everything that is real-time AI, always-on AI, context latency, reliability, personalization. And I think that can apply to products across all of our end markets. When it will happen, we are going to announce a new set of products at the Septran Taxi that are all going to be GnAI-capable products that were on phones, on computing products on all of the other segments in auto and IoT. And we think the monetization will happen 2 ways, right?
The easiest way to think about it is if our customers in our partners that are working with us. We mentioned a few in the prepared remarks, come up with the new use cases and you have now an AI-capable smartphone, that changes the size of the phone market. It could create an upgrade cycle in between 5G and 6G, and changes the size of the market, also improve the mix towards our product lines and ASP increases. For you to do device, Gen AI on device, you need a different computing platform. And that’s what we have been doing with our NPU. I think it’s probably the unmatched by any of our peers and ability to do high-performance AI pervasively and continuously a low power. And we look, those things could create an inflection point as hard to predict the timing, but we can see how it changes the mix and improve the ASP in our products.
Operator: Our next question comes from Ross Seymore with Deutsche Bank.
