Hard Drives and the Thailand Floods
Dan Binder – Jefferies & Co. asked: My question is tied to some of the sourcing issues the computer makers might have with the hard drives and the Thailand issues. Are you expecting that to have an impact on you in the fourth quarter?
Mike Vitelli – President, Americas, Enterprise EVP responded: We’re going to have a moderate impact with hard drives in the fourth quarter.
The manufacturers are doing the best they can to get that into the best products for them. For us, this means it will have less of an impact on the higher-end SKUs and probably more impact on some of their really entry-level value SKUs as they put the hard drives and the best return products that they offer for the industry.
Brian Dunn – CEO responded: I would also add that that’s been contemplated in everything we just told you this morning.
Binder followed up.: If you had to take your best guess at quantifying the comp impact, either on computing or the overall comp, is it meaningful?
Vitelli responded: On the overall versus what we just told you, it’s not meaningful within what we’ve been looking at for the year with mobile computing and notebooks overall.
iPhone 4S launch and the Mobile Business
Scot Ciccarelli – RBC Capital Market asked: Given the mid-quarter launch of the Apple (NASDAQ:AAPL) iPhone 4S, would you have expected the Mobile business to improve more than it did? Is there anything else that might have been a drag in that segment, especially given the very strong growth you highlight in tablets and eReaders, which I think is all part of that category?
Dunn responded: The iPhone happened in the middle of the quarter and it continues to gain momentum for us as our inventory positions improve in that category.
I would also say to Jim’s point earlier about mixing in November in different periods, that the Black Friday week which is extraordinarily strong for us while we had record connections in that day. People coming in and doing mobile phone setup is more challenging in that environment than it is in probably any other week of the year.
When you look at it in balance of where we are growing overall connections and where we continue to grow in December, January, February, we are pleased with it and the inventory positions continue to improve there as well.
Jim Muehlbauer – EVP, Finance and CFO added: Scott, the backend of your question about our tablets and eReaders part of how we report our Mobile sales?
Ciccarelli responded: My thought was with the iPhone launch, I would expect pretty strong demand for that, again I don’t know the supply situation as well as you guys. Then you also highlight triple digit growth in tablets and eReaders. I assumed that was all part of the Mobile segment?
Dunn responded: Let’s be clear that mobile computing includes notebooks, netbooks all the accessories related to them, tablets and eReaders.
Mobile itself is just the mobile phone business.