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#<UNK>e.
So let me address the question about the storage business.
We are certainly hopeful that we can exit the year at least with a profitable note for the storage business.
I think it's dependent on a few things.
Obviously, we're in the middle of a very significant portfolio change-out, and we have to execute on those.
So far, our record has been good with respect to the client and consumer segments.
But we have some big product launches, with respect to both data center and enterprise coming up here toward the end of this calendar year and in early calendar 2017.
And those would be really pivotal to us in completing that transition.
I think that again, track record has been good.
The SSDs have been well reviewed, and we're very optimistic that our subsequent product launches will be equally successful.
I also think it's important to keep in mind that we also are seeing benefit of 3D in the memory ---+ or I'm sorry, in the mobile business unit as well.
We saw that ---+ we had the mobile percentage of our NAND business this quarter move from the low teens essentially to the high teens, as a result of more and more quals there, and the increasing importance of the MCP portfolio.
So we are seeing benefit of that, really across multiple business units.
Let me just add to that on the seasonality question.
Q4 obviously, typically is a very strong quarter for NAND.
Hard to know for sure, but our sense is that the demand picture probably has more staying power than just the typical seasonality that you would see, given the strong growth in the end applications.
Yes, I'll take that.
So obviously, as has been the case, the specialty markets, the embedded markets, whether it's automotive, industrial, medical probably top of the list.
Within the computing and networking segment, graphics has been quite strong.
Server probably next, and then followed up with mobile and client.
In terms of demand.
But that ---+ it's a very quickly moving dynamic right now.
So yes, we're seeing that happen real-time as we sell through the early production and move more and more of the products into the TLC format.
And certainly more of that opportunity is ahead of us than it is behind us, given that we're just going to hit bit crossover for 3D in this quarter.
And as <UNK> said, we're continuing to transition which adds costs because it suppresses output.
But with more significant bit growth ahead, we would expect the cost reduction opportunity to accelerate a little bit here throughout FY17.
I think, <UNK>, actually it's really a little bit more about the lag that you typically see as pricing starts to turn around in some of these things.
Yes, there is an inventory effect relative to some of these products that we built up in inventory that were early production on either 20-nanometer or 3D NAND, et cetera.
As we sell-through, that's a little bit of a headwind until that's flushed out.
But it's really more around, as ASPs turn around, they don't turn around instantaneously.
And they didn't turn around until we were into the quarter last quarter.
So remember, we had a pretty significant beat relative to the mid point of our guidance last quarter, which gives you an indication that the pricing was starting to accelerate then.
It takes a little while to play out, and to flush through as we see these things happen.
So the trends are all in place.
And I think we're heading where you think you are, where we ought to be, but it can take a little while to play out through the financials.
Yes.
And I didn't provide a cost specific cost per bit target for FQ1.
Yes.
Well, there's a lot of components to it.
I think you put your finger on a piece of it, which is that the volatility in this business, I think we can conclude is going to be less going forward.
This certainly seems to have been borne out as we move through this last cycle.
It doesn't mean the cycles are gone, it just means that the volatility is less, and so that is less of a defensive driver so to speak.
An important thing for us in this whole picture is operational flexibility and control.
As we think about our ability to drive new technologies, either into manufacturing or to transition technologies with the Inotera assets, having ownership of that asset and the ability to mix and match different technologies, as well as potentially more value-add products and capture that value as significant.
Notwithstanding the fact that we have a good operating relationship with Inotera, we believe that there is more value we can bring as sole owners than as Board members and operational partners.
And at the end of the day, it gives us the ability as well to take the cash flow that's going to be generated with Inotera, and deploy it across our network where we find that most useful.
So a number of different factors playing into it, all of which, I think, point in the direction that we're moving.
<UNK>e.
So when we provided that CapEx guidance of essentially midpoint of $5 billion net of partner contributions, we did say it included contemplated investments from Inotera.
So that's an all-in number, as you know, we don't break out specific CapEx by fab, so we don't plan to start doing that now.
But that $5 billion midpoint, with [a little] range around it is inclusive of anticipated investments at Inotera.
No, the first out 3D was MLC, but we very quickly introduced TLC.
And as we said in our prepared remarks, most of our client consumer SSDs are now out on TLC, and we're qualifying TLC into mobile applications as well.
And we will be a majority TLC by the middle of FY17 here as we go forward.
So that's part of the engine of the significant bit growth that we've contemplated and forecast.
So depreciation life of the NAND equipment is about five years.
And really, we conducted quite an extensive study around how long the technology transitions existed, or took in the DRAM world, how long they were contemplated to take on a going forward basis.
We looked at the practices of others, both competitors and partners.
But really, the substance of the decision was related to what we anticipate and what we've been saying for some time is a slowing of the technology transitions, and therefore, the longer use ability of that equipment as the technology transition times change.
And the reality is, there's a range of answers you come up with when you do a study like that.
And much like the midpoint of a guided range, and seven years felt to us like it was not overly aggressive, but not overly conservative either.
So you could assume that we could have gone a year or two on either side of that, and we chose a position that we thought was reasonable, given what we know and understand about the pace of technology transition.
We ---+ yes, we expect depreciation to be somewhere in the range of $4 billion for the year, give or take.
And operator, I think we have time for one more question.
Certainly, first thing we're going to be focused on is actually accumulating the cash.
So that's my first priority, because I have to have some of it to be able to decide what to do with it.
And certainly at that point in time, we would certainly look at the opportunities that were available to delever.
And we would look at those in the context of, everything else that's going around.
And it's really impossible to say specifically what we would decide to do in the context of a future that's not yet here.
But I can tell you that delevering is an important priority.
And depending on how much cash we generate, we may choose to deploy a $100 million of that or so back into CapEx, if that's the right decision.
But delevering is certainly nearest and dearest to our hearts at the moment.
