Kate Scolnick - Vice President of Investor Relations Stephen Luczo - Chairman of the Board, President, Chief Executive Officer Pat O'Malley - Chief Financial Officer, Executive Vice President Rocky Pimentel - Executive Vice President, Chief Sales and Marketing Officer Dave Mosley - Executive Vice President - Operations Bob Whitmore - Executive Vice President, Chief Technology Officer Ken Massaroni - Chief Administrative Officer, Executive Vice President, General Counsel

Ananda Baruah - Brean Murray Joe Wittine - Longbow Research Richard Kugele - Needham & Company Jason Nolan - Robert Baird Rob Cihra - Evercore Partners Aaron Rakers - Stifel Nicolaus Sherri Scribner - Deutsche Bank Nehal Chokshi - Technology Insights Research Keith Bachman Bank - Montreal

Good afternoon, and welcome to the Seagate Technology's fiscal third quarter 2013 financial results conference call. My name is Aisha, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. At this time, I would like to turn the call over to Kate Scolnick, Vice President of Investor Relations. Please proceed, Kate.

Thank you. Good afternoon and welcome to today's call. Joining me today at Cupertino are Seagate's executive team, our CEO, Steve Luczo, CFO, Pat O'Malley, EVP of Sales and Marketing, Rocky Pimentel, EVP of Operations, Dave Mosley, our CTO, Bob Whitmore and EVP and General Counsel, Ken Massaroni. We have posted our press release and detailed supplemental information about our fiscal third quarter 2013 on our Investor Relations site at seagate.com. During today's call, we will review the highlights from the March quarter and provide the company's outlook for the June quarter. After that, we will open up for questions. As a reminder, this conference call contains forward-looking statements including, but not limited to statements relating to the company's historic and currently anticipated future operating and financial performance in the March quarter and thereafter, and includes statements regarding customer demand general market conditions. These forward-looking statements are based on information available to Seagate as of the date of this conference call and are subject to a number of known and unknown risks and uncertainties and other factors that could cause the actual results to differ materially from those anticipated by these forward-looking statements. Such risks and uncertainties such as global economic conditions and other factors maybe beyond the company's control and may pose a risk to the company's operating and financial performance. Information concerning additional factors that could cause results to differ materially from those projected in the forward-looking statements are contained in the company's Annual Report on Form 10-K, as filed with the SEC on August 8, 2012 and in the company's quarterly report on Form 10-Q filed with the SEC on January 29, 2013. These forward-looking statements should not be relied upon as representing the company's view of any subsequent date and Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made. I would like to now turn the call over to Steve Luczo. Please go ahead, Steve.

Thanks Kate. Good afternoon everyone and thank you for joining us today. Seagate's third quarter results again reflects strong operational performance. For the March quarter, we reported revenues of $3.5 billion and on a non-GAAP basis achieved gross margin of 27.6%, net income of $464 million diluted earnings per share of $1.26. On behalf of the entire management team, I would like to thank our employees, customers, partners and suppliers for the support and commitment. Our balance sheet remains healthy as we generated $678 million in operating cash flow in the quarter and paid $379 million for the early redemption of a portion of our long-term debt. We ended the quarter with approximately $2 billion in cash and investment. Returning value to our shareholders remains a priority. And in the March quarter, we redeemed 3 million ordinary shares for approximately $102 million and paid a dividend of $0.38 per share. And as a reminder, this payment was accelerated for the December quarter. Over the first nine months of fiscal 2013, Seagate has returned 75% of its operating cash flow to shareholders. Our focus over the last few quarters is centered on effectively optimizing our business model in an environment with limited visibility due to uncertain macroeconomic conditions and technical product transitions among our core customers. In the March quarter, overall demand was slightly higher than our expectations, primarily driven by the continued build out of our infrastructure and applications. During the quarter, we shipped over 47 exabytes of storage with an average capacity of 842 gigabytes per drive. For the first nine months of fiscal year, Seagate has shipped over 130 exabytes of storage, reflecting 33% year-over-year growth, which is well above the current areal density growth rate. Non-GAAP gross margins for the March quarter were 27.6% within both, our expectations and our long-term margin range target. The pricing environment and the quarter was benign and blended ASPs increased slightly driven by product mix. Non-GAAP operating expenses in the March quarter were $446 million, representing a 4% sequential increase which is primarily due to increased employee related expenses and investments in our new storage technologies. These investments support our continued focus on effectively aligning our operating structure to support a broader product portfolio of storage devices, including hybrid, solid-state drives and other devices and services which we believe will be critical to follow mobile compute environment. Capital expenditures for the March quarter were $221 million, representing approximately 6% of revenue. We continue to target capital expenditures at 6% to 8% of revenue. On a year-to-date basis, approximately 4% of revenue has gone towards maintenance of our existing operations while 2% of revenue has gone towards improving our global R&D footprint. The HDD industry continues evidence a lack of consistent visibility from our customers across most of our markets. As a result, we continue to plan cautiously which we believe will effectively position us to continue to optimize our financial and business performance. For the June quarter, we expect the unit demand environment that is flat to slightly down, sequentially. Revenue of approximately $3.3 billion to $3.45 billion, non-GAAP gross margins consistent with our performance over the last two quarters, non-GAAP operating expenses to remain relatively flat and lastly remaining on track to return of these 75% of operating cash flow to shareholders in fiscal 2013. Looking ahead, we believe the next few years the storage industry will present new and significant opportunities for Seagate. For calendar 2013, the growth trajectory of data-driven in part by cloud of mobile applications has our industry on pace to close to 500 exabytes of storage and is advancing at a rate which is more than two times greater than expected areal density growth rate. As a result, continued investment and heads in this technology and the continued absorption of capacity will be required to meet storage demand in all of our product segments. This trend in part supports the overall gross margin target of 27% to 32% that we have discussed previously. As an example, in the June 2011 quarter, which was before any market share shifts attributable to the flood or industry consolidation, Seagate produced 150 million heads with an average capacity of 180 gigabytes per head against the total industry TAM of 180 million HDD units. In the March 2013 quarter against the total industry TAM of 135 million HDD units, Seagate also produced 150 heads. However, these heads had an average capacity of 280 gigabytes per head. The growth in mobile computing and more affordable secure and available cloud information infrastructure is driving the need for storage across a wide and these are the key areas where we are investing in our R&D efforts and aligning our technology portfolio. In the mobile space, full featured devices capable of sharing and displaying content rich data have already grown to hundreds of millions of units. IBM recently estimated that there is approximately five petabytes of mobile data created each day from phones and tablets and from other machine learning exchanges. We believe that with the number of connected people, availability of rich content and increasing bandwidth, mass storage will continue to expand across a variety of devices in the PC plus environment. In the client space, while PC unit demand has flattened over the last several quarters, the demand for heads in disk and average capacity per drive continues to increase. Some of the innovative products we have introduced this year that have been well-received by leading OEMs include our 7 millimeter, 500 gigabytes for ultra mobile devices and two terabytes desktop hybrid products. We began shipping our third generation of solid-state hybrid drives in the March quarter and we have additional performance-based and high-capacity client products on our roadmap for this year. In the branded space, we personal files, wireless access and SSD performance based products are catalyst for continued growth and our acquisition of Lacie is proving to be a successful investment for our consumer and small business technology offerings. In the enterprise business, the expansion of cloud infrastructure and cloud applications requires high-capacity, high quality products. We will continue to provide a portfolio of enterprise products that meet the needs of the cloud environment including hard disk drives, solid state drives, hybrid drives and a complete line of flash-based PCI solutions through our OEM and distribution partners through our strategic investments. In summary, Seagate is optimistic about our storage technology roadmaps as it relates to current technology implementations as well as the advancing mobile, cloud and open source environments. We look forward to updating you in more detail at our Strategic Forum in September. Aisha, we are now ready to open up the call for questions.

(Operator Instructions) Your first question comes from the line of Ananda Baruah with Brean Murray. Please proceed. Ananda Baruah - Brean Murray: Hi, guys, good afternoon. Congratulations on a solid quarter and thanks for taking the question. I guess, Stephen, the first question is around ASPs. Can you just walk through the dynamics that led to the flat pricing for the quarter. It feels like it was, like you said, the benign, like-for-like, and then some mix but just the specifics would be helpful. Then I have, it seems like you are guiding down 3% blended for the June quarter. If you could just walk through those dynamics as well. Then I have a quick follow-up. Thanks.

So, on the pricing, like you said, is benign. We haven’t gotten into any specifics of what that is but it was below historical rates and that’s what we expect to be the operating model going forward as long as supply demand stays relatively in check. The mix was a positive element for the quarter. The business-critical near line drives clearly, forward growth segment for us and that helped the mix. But, all-in-all, it played out as much. Now, for the next quarter, we have a still benign pricing. We don’t have excessive pricing there by any stretch of imagination. It is a very benign but the mix is probably somewhat offset due to seasonality. Ananda Baruah - Brean Murray: Got it.

In the notebook space, we definitely felt that there was opportunity and the need to increase pricing marginally and we did do that and that pricing has held so far. Ananda Baruah - Brean Murray: Got it. Thanks a lot. And, Steve, how should we think about the new pricing this quarter, next quarter manifesting itself on the margin. I guess, longer term you gave guidance for the June quarter obviously on the margin, because we think about sort of what might allow the margins to move up into the upper half or towards the middle of the longer term gross margin guidance range whether that you sort of envisioned that they get it there over time. Thanks.

Okay. A couple of things, I think one is as you TAM expansion in the back half of the year. From a capacity perspective, the industry is kind of bumping up against its limit. I'll turn it over to Dave Mosley in a second to talk on that, but if we do have TAM growth that I think is actually more related to macroeconomic conditions and also I think to some of the new product offerings by the OEMs and the client. We are pretty excited about some of the things that we see in the notebook space, for example. Then I think, the other big trend is just a shift to the cloud. If the cloud continues to build out and it's our belief that we are going to see a fairly dramatic acceleration in that exiting this year and going into the next calendar year, given the number of heads in this that get absorbed into that product area, I think there is going to be some pretty tight supply situations in the back half of the year and we have already been signaling to our customers that the current pricing to me even look favorable relative to the last half of the year, because I think we could start seeing some constraints in near line even exiting this quarter. I'll let Dave talk to some of the math behind.

Yes. To the comments that Steve made earlier, the industry is relatively constrained, say roughly 500 exabytes of capacity and you will put capital online sparingly as we talked about earlier, but the growth of the cloud primarily continues to drive a lot of capacity into the industry and so as we see that we talked about the areal density growth, our ability to deliver that capacity relative to the sheer capacity growth. I think those are the two vectors that the demerging. And as we look to invest in the future I think we make sure we see the requisite and return on capital that, but trend definitely old that areal density is not growing nearly the rate as the capacity growth is and that's ultimately [constraint].

Your next question comes from the line of Joe Wittine with Longbow Research. You may proceed. Joe Wittine - Longbow Research: Hi. Thank you. First question, I want to talk about capital deployment I guess. with the near-term piece of debt taken out. You saw I guess a pause on the buyback this year and that maybe just as important that share count target for the end of calendar year 2014 still possible in your view with the appreciation in the share price? Thanks.

Yes. On 2014, we are certainly still committed to that even with share price… Joe Wittine - Longbow Research: Then your near-term thoughts on capital deployment?

Continued dividend as stated and buyback shares within the limitations that we have today on that would change for any reason, we certainly modify that, but as Steve and I commented, we are still good for the 2014 to 250 million shares. Joe Wittine - Longbow Research: Thanks. Then, Steve, in your prepared comments, you talked about being seldom growth in you form factors in the second half of the year. Intel recently said they think of 30% the client PC environment could be these new form factors ultra, fans, convertible, detachable, just curious from your point of view how many of those products do you think will be carrying or will be initiated with HDDs or hybrid HDD? Thanks. I think over time the penetration is going to be pretty high. I mean, it's kind of funny watching the tablet evolution. Reminds me of the netbook Dell evolution and certainly it's just that the tablets started with really great screens and no keyboards. Now they have keyboards and you can take them apart and I think shortly, where you are going to see tablets with HDDs in them as well and all of sudden what it was going to look like again going to look a lot like a notebook. So, I think it's just really a question between the breakdown overall of what's a super thin notebook, what's a slightly bigger notebook, what's a higher performance notebook. Some of them with detachable keyboards, some of them not. Some of them with flash and some of them with HDD. If you take up the super mobiles, we think the tablets today, I obviously believe that penetration rates is probably go into the 30% to 40% range because if you can deliver 500 gigabytes of storage with the same performance that you get of off flash for all those people that want to watch something through those pretty pieces of glass, you can at least store it somewhere. But I think it’s a ramp that begins hopefully sometime this year and then continues to accelerate.

I think with that, Stephen and Dave talk about some of our emerging form factor and product solutions on the clients' side over the second half of the year and you look at the total TAM between classic PC desktop and the tablet, you have got 80 million to 85 million units a quarter on the classic PC notebook desktop side and then you have another 40 million to 45 million tablets, you have a total market of like 130 million to 140 million devices. I think based on the product platforms, we will see over the next six to months usually serviceable simple market is probably is north of 100 million units which is a positive because we have been dealing with a serviceable market that’s been 80 million units. So it certainly has to be proven but I think we are optimistic about the opportunity to extend or expand the service that’s obtained on the clients' side.

Your next question comes from the line of Richard Kugele with Needham & Company. Richard Kugele - Needham & Company: Well done on the quarter. So just a few questions. I guess first that comes to the five millimeter rollout. I know you showed us last September at the analyst event but can you just update us on your timing on that side for both the standard version and the hybrid?

The marketing people really hate it when I do product announcements on earnings call. That being said, as you point out we show that we were up to back in September, we continued along with a great deal of positive momentum on our product offering. I expected that you will see something in the not too distant future about our product positioning and what the engagement has been like at the customer level. Richard Kugele - Needham & Company: Do you get the sense that the OEMs are leaning more towards the five millimeter versus the seven millimeter? Is there going to be a learning curve before they are willing to adapt their designs to that or take more advantage of that form factor?

No, I think right now they are for different devices like we were just saying in the prior question. Five millimeter, to me, ultimately at least initially is, it could go into thin and light as seven millimeter could go into a thin and light and especially if you are just doing a new seven millimeter, you have a lot of capacity opportunities. I think that’s the bigger play for hybrid as well basically. Five millimeter, I think, initially is probably going to be targeted more towards, we think it is a tablet market today and there, whether or not you need a flash based device or not is a function of algorithms in hybrid. Seagate's fairly well advanced in our hybrid algorithm. So we have the capacity to leverage off of the flash in the system but I think ultimately again, as I think of what that product path looks like a couple or three years out. It just really going to be a function of capacity. There is no scenario that we think off that says get two disk in the five millimeter. So you are going to limit yourself to 500 gigs or 750 or whatever the point after that was for seven millimeter and of course you are going to have to accept that and there will be plenty of need for that amount of storage on portable computing devices. So I think they are separate markets and they both are going to be picked by (inaudible). Richard Kugele - Needham & Company: Okay, that’s helpful and then in terms of your ability to take cost down, can you just update us on where you are in the areal density transition for the one terabytes per platter and then any comments on the Chinese regulatory bodies approval on fully integrating the last bits of Samsung?

Steve, you want to talk about transition?

Yes, relative to areal density transition one terabyte a platter, We still have some of the 500 gigabyte per platter technology around but its more of a convenience thing for us. I think we could transition if we wanted to. So I consider that transition complete. Certainly, one, two, three terabytes and on up, that’s all on that new product family.

On the [comp] situation, we continue work with the regulatory agency. They are in, as we said before, we do it as constructed relationship and we don't have any current thinking about when that relationship is going to it's personal direction, but we think it's been a positive relationship as we (Inaudible).

Your next question comes from the line of Jason Nolan with Robert Baird. You may proceed. Jason Nolan - Robert Baird: Great. Thank you. Steve your comment on visibility not being very good broadly is understood wondering if the cloud storage part of your market provides better visibility given your comment on constraints in the potential constraint in the back half of the year.

That's really some interesting question. It does, but I think the lack of visibility overall is, in my mind, fairly just a function, what I will call macroeconomic conditions. I think maybe more exclusively deficit related issues that there's still as hesitancy I think certainly among multinationals they kind of extend too far off, so some of the structural issues around spending are understood a little better. That being said, inside of the cloud build out area, I actually think the lack of visibility is one where what we are seeing is probably going to be below what really gets rolled out. There's been kind of a bit of an uptick in the cloud build outs and build out have been consistently growing for a while, but it is certainly our sense from engaging with either our OEM customers or directly to the companies that are doing the cloud build outs directly that we maybe within 12 months of some your step function changes that build out has guys for the company starts go global and their footprint, starts recognizing some of the issues around bandwidth as well as some of the issues around in-country storage requirement. So, the kind of the scalable of that infrastructure I think is potentially going to be bigger than what maybe people thought just six months ago. Jason Nolan - Robert Baird: It seems like we would see blended ASP start to mix shift upwards at some point.

Yes. That's just, but to Dave's point it also probably have those products mispriced right now, because the capacity issues around it from heads in disk absorption as well as other factors such in the past are dramatically different. That's just a different economics for us, so we are watching it closely.

You next question comes from the line of Rob Cihra with Evercore Partners. You may proceed. Rob Cihra - Evercore Partners: Hi. Great. Thank you much. Two questions if I could. One, just one, I guess, it's an [question], but lot of people think always wonder what the TAM being 136 in the quarter versus PCs that were down and recognizing I know the drive market [PCs] in the back half of last year. Just how comfortable you are in terms of inventories out there both in terms of channel and OEMs given the fact that at least mathematically more drive shipped and then or at least drives or flash and PCs down and then I guess following on that any ability or I know you say visibility is bad and it is, but if you look in December quarter WD talked about maybe first take at 140 tight TAM is that you something you think is reasonable at this stage? Thanks.

I think the first question is interesting. Obviously just our hard drives will not, but the desktop 3.5-inch drive doing the tune up and currently just don't go. They don't just go into PC. There's other lots of devices that they go into including data devices and one thing I think that we have seen from our market research is that you with the increase of tablets and smart phones, if you will, the attach rate of data devices has gone up pretty dramatically in some market segments increased from like 20% attach rates to 50% attach rate, so part of it may be that. But with respect to the question, we don't see any issues in inventory and whether or not that's what we can see inside the hubs, or clearly in the channel, channel inventory has been really flat for last several quarters actually certain measure probably got lower in the March quarter and we manage our hub inventory really closely. Again, I am a little suspect of the data, Rob, in terms of when people cite, PC shipments being down. Are they talking about individual companies or what ODMs are saying because it is also shipped between what the PC manufacturers are doing in terms the mix of internal builds versus ODM builds. You could see it could be said it’s the ODM level but that’s doesn’t necessarily a one-for-one relationship to what the PC industry is shipping. So I think there is more work to be done by everyone in terms of this kind of disconnect and we are certainly working with all the industry analysts and trying to resolve it but we certainly don’t see any inventory buildups. In terms of back half of the year, again, I think it is, to mo, it is going to be more influenced probably by macroeconomic issues but the macro situations stays the same where it gets better, they yes, I do think the back half of the year shows that we are going to rollout today. 140 isn't a whole lot higher than 137 so I might saying numbers slightly above that but we just have to wait and see what happens. The industry is well geared right now to operate very efficiently between 130 million and 150 million units by just targeting the low-end and chasing the upside. That’s the smart thing for the industry to do. So I am not worried about it breaking out away from us other than to Dave's point that if it breaks above probably 150 million or 155 million units and there is a mix shift, the industry is going to tapped out of exabyte capacity and there is no way to address that in short-term.

Your next question comes from the line of Aaron Rakers with Stifel. You may proceed. Aaron Rakers - Stifel Nicolaus: Thanks for taking the questions. First question. Just going and looking at the enterprise piece of your business and the industry in total. By my calculations the industry grew shipments by about 7%. Clearly we have seen some weak data points out of some of the OEMs. So I guess, my question is how do we look at that data and triangulate that relative to what you are seeing from the cloud and maybe you can give us a contribution from what you are seeing directly from those type of data centers at that point and help us understand that up 7% relative to some of the other demand data points we have seen?

Again, I don’t know what other demand data points you are referencing exactly but if you are asking me, do we see demand increases from cloud service providers? The answer is, of course. One will know architectural features that the cloud service providers are pursuing are architectures that allow them to buy drives directly and put their own software on top of that as opposed to buying that software stack from someone else. So we believe that’s the beginning of a trend that’s probably going to sustain for many, many years. Aaron Rakers - Stifel Nicolaus: Any idea of contribution or share position that you have in that environment today?

In the cloud environment? Aaron Rakers - Stifel Nicolaus: Yes.

We feel that we are, overall, at least equal to what the standard enterprise share is against our competition and in some cases in a preferred position. Aaron Rakers - Stifel Nicolaus: Okay. Then the final question for me, as we look at your capital return strategy and we look at free cash flow generation, how should we think about the model progressing, in that context of how we should think about annualized free cash flow generation?

So, on the capital returns, obviously, we have a dividend payment in place and we are certainly committed to that. So that will be part of the return to shareholders, now and in the future. Of course , the one item we said to go on a 250 million shares, you could model that anyway you want. It is going to be somewhat lumpy as we go through some of our (inaudible) issues but we are committed to the deployment of that capital. So you can certainly put those two numbers in and see the level of cash that is going to be returned to shareholders and then clearly our business could support that level. So you are back in that way. Pat O'Malley: If your question is, when do we see a shift in CapEx as of relative to the return capital, the answer is, not until the bathtub is full which I don’t think happens till the end of this year. Then we will slowly address the capital needs that we see in the marketplace as we confirm. We are not going to be needing the capital, yet in this uncertain environment. Aaron Rakers - Stifel Nicolaus: I guess, what I am asking is, you are doing about $1.8 billion of annualized free cash flow in this most recent quarter, is that the right level to think about or do we go higher? The driver is high of that?

Slightly higher than that. Certainly, as Steve said as business evolves you get some TAM upside and we think this is going to more and more, we certainly believe our cash flow should be at least that and grow. Aaron Rakers - Stifel Nicolaus: Okay. Thank you.

Your next question comes from the line of Sherri Scribner with Deutsche Bank. Please proceed. Sherri Scribner - Deutsche Bank: Hi. Thanks. Pat, I just wanted to round out the guidance a little bit. Steve, you gave us a lot of detail, but just thinking about interest expense. I know you bought back some debt this quarter. How should we model interest expense in terms of the tax rate? You guys have a pretty wide range 3% to 10%, I think what you talked about in the past that you haven't really been. You've been below that. How should we think about taxes and what type of share count are you thinking about for June?

Sure. On the interest, you just take the $5 billion out of that. It's a simple number. Just take that some level as you are taking that down, but it's going to be relative to all big numbers are going to be still relatively flat there's just a tranche of that was a smaller tranche of that, but was significant tranche on getting the security out. So, that's all I do there. Tax rate, it is variable somewhat. I [stock] use $15 million to $20 million as opposed to tax rate crazy tranche and tax rate I think that's fair, and I would use the share count where we had this quarter and relatively flat for next quarter given what level share we will be buying. Sherri Scribner - Deutsche Bank: So, just to clarify on interest expense or you can take $5 million out of interest expense sequentially?

Yes. Let's take around that level.

Your next question comes from the line of Nehal Chokshi with Technology Insights Research. Please proceed. Nehal Chokshi - Technology Insights Research: Yes. Thanks. I would like to get two questions. One is with the gross margin. Looks like you had a positive mix shift in terms of enterprise non-compute versus client. Your June was flat also flat [q-on-q]. I know that the volume was down 4% q-on-q, so the question is purely volume that drove the effective higher cost per drive up q-over-q or is there something else going on there?

It's much more than mix driven than anything else. The cost structure, whether from input cost to the factory end delivery was relatively flat and somewhat better, so it was primarily driven through the mix. Nehal Chokshi - Technology Insights Research: Okay. And staying on a sequential theme here, mission-critical consumer electronics and branded hard drives they all seem to have trended above seasonal, so can you discuss what we were drivers of Seagate's above seasonal performance there? Was that industry or was it Seagate-specific. And importantly, do you see those drivers being stable?

Yes. I think on the mission-critical or on the enterprise class drives, there was again some unique advantage that we had in product that we took advantage of and then on the [CE] it was strong in winning more market share at some of the CE customers that we underserved in the last several quarters et cetera. So, I think those were probably the two key changes in and what you in those lines of product. Nehal Chokshi - Technology Insights Research: Okay. Thank.

Aisha, we'll take one more.

Your last question comes from the line of Keith Bachman Bank of Montreal. Please proceed. Keith Bachman Bank - Montreal: Yes. Thank you. Number one, why was there such a disparity on the client side between yourselves and WD this quarter in particular, desktop WD had 54% sequential growth and yours was down I think 11, and then my follow-up is on the TAM, but I wanted to kind of go through that as why was there such a disparity and what do you think that portends if anything?

I guess I am not sure what data you are assigning right now. Keith Bachman Bank - Montreal: Just on the client side sequentially, sorry.

What are you trying to find? Keith Bachman Bank - Montreal: Well, we'll just focus on the desktop if we could.

I would say it's as much price positioning, Keith. I mean, we went in there as stated in my comments, we are fairly benign on the pr and certain capacity points we are just not willing to move to market. So that’s clearly one aspect of it. I do not think it necessarily has anything to do with the portfolio or attribute anything to our position going forward but probably the largest driver of that was price position both in the channel and in the OEMs. Keith Bachman Bank - Montreal: Okay, let's shift to the TAM. Steve, you mentioned, let's just say, for argument's sake, the TAMs caught 145 in the September and perhaps even December quarter. How are you thinking about the contribution within those numbers if they turn out that way both from hybrid and/or all of the media in the tablets? Is there much contribution in the back half of the year from those type of products as we look out?

On an absolute basis, there will be some decent growth on hybrid but as a percentage of what we ship it will still be pretty small. I would say, in terms of tablet, you could go from zero to hundreds of thousands or maybe a bigger number by the end of the year which is big numbers but obviously on a percentage basis, they are tiny. I think the more significant thing is that once the penetration starts then you decide what type of curve you wanted to draw if you are at least getting into a marketplace that, I have been told that moment we weren’t participating and that’s what we are more excited about. Keith Bachman Bank - Montreal: Steve, if you look at just 2.5 inch drives, would hybrids in December quarter make up 5% of that that notebook shipment or 10% of the 2.5 inch category?

I think you have to look at the notebook systems today how many of them are flash based. The umber is, flash based notebooks are 10% or less. Keith Bachman Bank - Montreal: Yes, its less than 10%

So if you are saying could we be half of that, what 5% would be good.

There are no further questions in the queue at this time. I will now like to turn the call over to Steve Luczo for closing remarks. Please proceed.

Good, great and well, just on behalf of the management team and I want to thank you for joining us today. We look forward to talking to you next quarter.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.