"QCT revenue will be up more than 35% year over year. Operating margin we think will be up more than 40%"
Let me just give some perspective on the full year on the margin. Because I think it’s hard to see it for a couple of reasons. Number one, the margin performance for QCT [unintelligible] loaded in the second half of the year and so you’ll see more of that impact in Q3 and Q4, and we already talked about the fact that even on falling volume you’re going to see revenue and operating margin up and our expectation in Q3.
But if you just step back and look year over year, QCT revenue will be up more than 35% year over year. Operating margin we think will be up more than 40% and again, it’s driving the opex growth of the company year over year, but it’s still at a lower percentage than its revenue growth rate. So we are seeing some leverage in the margin.
Really the short answer is it’s end demand driven. As I’ve explained in the past, we’re continuing to grow our licensee base in China, and our license agreements require payment of royalties irrespective of whose chip is included in the device. And I think I’ve taken folks through a few times the robust process we have in place of monitoring the market in China and really trying to drive compliance with our agreements. So no change there. Really a demand driven story