Analog Devices Inc (NASDAQ:ADI) Q1 2017 Earnings Conference Call - Final Transcript
Feb 15, 2017 • 10:00 am ET
John Pitzer, Credit Suisse.
John William Pitzer
Thanks for letting ask a question. Congratulations on the strong results. Guys, relative to your initial guidance, the big upside in the Jan quarter came out of consumer. Just kind of curious what changed throughout the quarter? Was this really just kind of a better mix with your large consumer customer where that would give you more content on a larger screen? And as you think about kind of the opportunity of that customer, how do we think about content going into the back half of this calendar year? Thank you.
So, yeah, I would say that in general, with the consumer customer, sometimes it's hard to totally predict kind of the weekly shipment level through the entire quarter, and so we make an estimate based on what we think will turn through the quarter plus what we come into the quarter with backlog. And there's varying scenarios, I would say, related to how that would go, and this was obviously the most optimistic scenario. So it just turned out better. I would point out though that we didn't expect nearly the strength we saw in the B2B markets either, and so they contributed to the upside as well. So we're really happy that every end market did a bit better than expectation. So that was awesome.
So just to add to what Dave has said there, John, we, as you know, have been working hard to diversify our position and decrease dependence on any single socket. And we have more content in these applications today than we had this time last year, so that certainly helps as well. So we've got more ASP per system, and we continue on the track of diversifying to get more and more sockets in that area.
Tore Svanberg, Stifel.
Yes. Congratulations on the strong results. It looks like you announced a new distribution agreement overnight. Could you maybe elaborate a little bit on that? And maybe this is an opportunity to just talk about the strategy in list going forward.
Yeah, so we've had a three decade relationship with the distribution -- maybe 25 years with the distribution channel in general. And what we're striving to do, Tore, fundamentally, is we're trying to deepen the level of support and give a better breadth of service for our customers, we have many tens of thousands of customers. So the channel plays an important role, I think, in the broad breadth of logistics, services across the entire suite of customers and, particularly, with the smaller customers, providing a lot of design service. So basically, we've decided to simplify the structure to enable us to bring the level of support that we desire.
And we expect basically to be able to leverage the more focused channel team that we've got and essentially draw on a more comprehensive suite of, in a more focused way, end to end support services that could range from design, design help, also prototyping and of course logistics support