Welcome everyone to MediaTech's 2019 Second Quarter Investors Conference Call. Your speakers today are David Gould, MediaTax CFO and Tian Yizeng, MediaTax Senior Manager of Finance Division. Mr. Zheng will report 2nd quarter results and Mr. Guo will provide prepared remarks.
After that, we will open for Q And A. Now, I would like to turn the call over to Mr. Zheng. Mr. Zhang, go ahead, please.
Good afternoon, everyone. Welcome to Huya 2nd quarter 2019 conference call. As a reminder, all content provided on this conference is for informational purposes only. Not intended for investment advice. Either the insurance or any of its vendor providers is liable for any actions, taking in reliance on content 10,000,000,000.
MediaTek provided on TFI's financial measures and supplemental information. Earnings distribution is made accordance with financial statements based on SIFRS. I authorize recording or redistribution of the video leo text and presentation content of this teleconference is strictly prohibited. By participating in this teleconference, You are free to accept the foregoing terms and conditions. Now let's start with the 2019 second quarter financial results.
The currency here is $30. Revenue for the quarter was $61,600,000,000, up to 18.8% sequentially and up 1.8% year over year. Gross margin for the quarter was 41.9%, up 1.2 percentage points sequentially and up 3.7 percentage points year over year. Operating expenses for the quarter were $19,600,000,000, compared with $18,300,000,000 in the previous quarter $90,000,000,000 in the same period last year. Operating income for the quarter was $6,100,000,000, up 93.9% sequentially and up 50.1% year over year.
Operating margin for the quarter was 10% compared with 6% in the previous quarter and 6.8% in same period last year. Net income for the quarter was $6,500,000,000 compared with $3,400,000,000 previous quarter and $7,400,000,000 in the year ago quarter. Net profit margin for the quarter was 10.6%, compared with 6.5% in the previous quarter and 12.3% in the year ago quarter. EPS for the quarter was $4.11 compared with $2.17 in the previous quarter and $4.72 in the same quarter last year. We also provide our TFI financial measures, which exclude share based compensation, the utilization of acquisition related assets and tax effect If you refer to earnings press release and presentation for details.
For the third quarter of 2019, we expect revenue to be in the range of $65,300,000,000 to $70,200,000,000, up 6% to 14% sequentially. And our forecast strange rate of $31.280 to USD 1. We are forecasting the gross margin at 41.5 percent plus or minus 1.5 percentage points, and quarterly operating expenses ratio to be at 31% plus or minus 2 percentage points. And now I would like to turn the call to CFO, Mr.
David Ku, for prepared remarks. You, Jamie, and good afternoon. So, good morning, Timna, where you are, a quick update for our 2nd quarter's performance. Before I dive into buy 3 major sectors, in overall, for the second quarter, even though we see a a pretty uncertain macroeconomics situations out there. I don't know if we'll still deliver a stable and good results for q 2nd quarter's performance, especially if you're judging from a gross margin perspective, that will be the 4th consecutive quarter.
So we continue to improve our gross margin. And now margin reached to 41.9 percent in Q2, mainly due to our strong product roadmap and also a much more balanced business portfolio. With that, I'll just go through, quickly, go through the 3 major business lines, which include a mobile computing, growth sector, which include IO premium elastic and also about the smartphone related products. For mobile computing, in Q2, the overall revenue contribution from mobile computing was around 30% to 35%. We see a strong quarter growth, mainly driven by our P9 new products in Q2.
They would believe that our growth momentum will continue into Q3. Overall, I guess, for this year is, starting from P60, P65 was for P90. And also, recently, we just announced a new series called nineteen. That's a new, product portfolio, designed, especially for gaming related platform. Operator's CPU and GPU and also our APU, which stands for, AI process units.
And we have a pretty good, customer buyout and also design for new gene ID product. Overall, we see, strong growth in Q2, and also we believe the growth will continue in Q3, on the mobile computing sector. In addition to 4G product portfolio, I mean, currently, you've bound a major focus. If you 5G. We kind of announced about our 5G product, the first product on the high end product side.
And, I think recently, especially for the last there are some others market movements. For example, China just issued a 5 g commercial license, they skip something recorded. The pre, commercial go to the commercial ground, we believe that is actually a strong signal to show, even, strong 5 gs events in China for next year. And also recently you're trying to mobile, test all major 5g Chipset vendors, product performance, which including, the product, the eye, consistency, the mind modes, basically all different technology attribute and also, for dual node assay and also LSA, I'm all from basically the media side performance, actually leading bench. In the China Mobile's testing fab.
And we are targeting to send us, our 5G SOCs and allow in third quarters. And based on the current deciding situation, we believe we'll be catching the first wave 5G product next year. And if everything went well, it's very likely, I think it's, our product will start to ship, in 1st quarter next year. So we will be able to see, with MediaTech inside Shift 5G smartphone in the marketing for the quarters next year. I think that's, a quick update for the mobile computing sector.
Move on to the next sector, which is the growth sector, again, growth sector, which is called in IoT, our payment also asset. I think for Q2, we also see a strong double digit growth for IoT especially those based on the quarter over quarter perspective for a year over year perspective. I think for the, T, is mainly driven by strong, small speaker demand and also, TWN for 2 wireless sectors. And on the PMIC side, I think, this year as we see the platform synergies start to kick
it in what do you
mean by the smartphone, the platform synergy is 1,000,000 on the smartphone side? Because right now, a lot of our smartphone products are equipped with media their own, sub PMIC. So we see a double digit growth, new over years and also a Q on the PIVIC side. Gillette, one of the least, if we choose the asset sector, for the asset sector, I think we have a consumer asset And also we have enterprise assets, enterprise assets, as we prove this is close, we start to get the first revenue in, in Q2Q 3. Currently, the revenue level is still very small, but we do believe that actually is a enterprise asset to open a new address, sizeable addressable market for media And, we actually getting more design in this year.
And, we believe that would be translated into more revenue into the next 2 to 3 years. The next one is really our smartphone related product, which including set of box and also sell the products. I think we see a steady growth compared to mobile tuning technology and also, growth sectors and resumes weaker, but we still see a steady growth in Q2. Especially for TV, But looking forward for second half, there are some macro uncertainty. All these are actually the growth may be slowing down.
So Q2, overall, on a whole Q on Q basis, I think, probably what roughly weak on the smartphone sector. But, if we put that short term macroeconomic situation aside, I think we still feel fairly comfortable with our overall TV SOC position, both from technology perspective and also from, technology perspective, currently, we're trying to incorporate more and more AI technologies into our TV SLC product. For example, currently, we just launched in our flagship SLC, the code, SLC S IHOM fit. The S IHound is supporting AKE coding, high speed AI computing, picture quality. And also, we have face recognition, syncs, connections, verb voice recognition and voice the functions on the TV platform.
We will, update more of the TV products in the next few quarters. I mean, that's conclude my, quick update. Thank you, Debbie.
We are now ready for Q And A session. May we please have the first question operator?
Yes, thank Please ask your question after your name is announced. And as a reminder, it is greatly appreciated that you turn off the speakerphone mode of your device to prevent possible echo effect. Thank you. 1st, we're having Randy Abrams Credit Suisse. Go ahead please.
Okay. Yes, thank you, David. For the details. I wanted to ask the first question just on your view for the 5G market for next year. I'm curious more for the ramp up if you expect much coverage to support volume ramp in first half, or if you expect it to be mostly 2nd half weighted.
And with your sampling of the first chipset now and then targeting first quarter. I'm just curious if it does pull in the first half, if you think your market share could be up to the level you're at in 4G or it might take a few more quarters to kind of reach the speed you're at in 4G?
Remi, I think for 5G market, especially for China, our view is that the overall market demand could be around 100,000,000 cost. And so without a 1,000,000 plus, most likely, all of this for 5G sectors from a segmentation perspective, Dolby on the high end and also need to go down to the benchmark as well. So if we, express that or interpret that, from slight people perspective, say, what's the selling price? I think maybe for the first half next years, the 5G product is still going to be, 3000 above, most likely maybe 3500 gigabytes. But once we get in the 2nd half, I mean, the 5G sector probably will go down to below 3000, metrics.
So, with that, you know, understanding, I think, let me answer your question. I think most likely from the overall volume from our own, shipment perspective, most likely will be the 2nd half heavy. I mean, 1st half, we do select some of the shipments for 5 g, both of the high end and also for mainstream. But in terms of overall volume, I believe, actually the 5G shipment will be in the 2nd half heavy patent. Okay.
Great. Okay. And if I could follow-up, maybe a initial view, if you can gauge the competitive landscape, the start of 4G, it seemed like an aggressive pricing between yourself and Qualcomm for market share and even ended up impacting their margin. If you could take a view how you're seeing like early stage ramp up if it could play out differently? And also how you're viewing Samsung, there may not be the first the choice because they also compete, but if you see them having any impact both on share or pricing?
I think overall for 5 gsLC is a quite a competitive dynamics out there. So I'd like to say, and it's really just, Qualcomm and also Samsung and MediaTek right now. But overall, we do believe both from the product portfolio perspective. And also from a timing perspective, and on top of our team, the performance, I think we have, quite confident that should be able to, a, not your cash in the first way B, I think we should be able to get a reasonable market issue for that. In terms of a competitive landscape, I think these like you, as you know, for 4G, it's been quite competitive out there.
For 5G, our view is probably with a similar competitiveness, we don't think it will be even intensified.
Okay. I guess the follow-up, and I guess on the profitability, because you spent a lot of through the 4G cycle redesigning to get the optimal cost structure. I guess factoring in a similar, even tougher competitive landscape, but is there range you're kind of expecting as you hit this 1st wave inflection margin, if it's kind of the similar 40, 43 of the base case or plus or minus
It's hard for me to provide, sorry, the gross margin guidance right now, because like I say, it's still a moving target out there, especially competitive dynamic sellers. But overall, I think we feel very comfortable that ASP from the Abigail credit compared to our current 4G product portfolio. So regardless, the gross margin ratio, I think the gross margin dollar, which will be related to the operating margin dollar ratio should be very aggressive. But in terms of exactly gross margin ratio, we probably still need to wait for next few quarters, because you know, it's, quite a dynamic out there. Okay.
And I think on the operating side, you've had some ability to get some leverage or not need to grow much in OpEx. Do you see that, I guess, now factoring in, you've got the 5G millimeter wave and then some of the networking auto, or do you think given the base you already have you could kind of continue that, just modest increase on the OpEx side?
Well, I think for the OpEx side, first of all, for this compared to last year. I mean, all the COBACs, operating expense only increased, moderate revenue. And given the fact, I think the first product is, TAPI Now, we're just gonna, for the first 5 g products, Tobi Now, you know, we're just gonna give you all of the simple, in 3rd quarters. And, a few more products on the way as well, I think the heavy lifting part of 5G is pretty much dumb. We don't really expect, in order to expand or extrapolate our 5G product portfolio will increase substantially our operating expense.
I think, definitely will increase a bit, but I don't think you're going to be, substantially. That's one point to think about that. Another point actually is, I think the last few years, what we did is we do a redistribution of our for, resource and, to resize really just we moved a lot of research from 4G and also 3G. Into 5G right now. So I guess our goal is trying to increase the 5G investment, but, on the overall scale, we can still contaminate or toward operating expense to a mile or low single digit growth.
I think that's our target.
Okay, great. And just the last question I want to ask is, in initial view, 4th quarter, there's usually a seasonal pullback and if you're kind of late stage 4G, but wondering if there's any swing factors that either product launch or share that could swing that or if at this stage you're expecting kind of that normal seasonal or any risk of a worse than seasonal
I probably don't have a detailed visibility for 4th quarter right now. But in general, I think 4th quarters, based on the normal seasonality, it should be coming down overall. But it might be a little bit too early to talk about by sector. I mean, I guess one of your concerns or things trying to sort it out, even on the smartphone side, but I probably would not BlackCOM and right now for 4th quarter.
Next, the line is open to you, Gokul, Harry Harlan, JP Morgan.
Evening, David. Thanks for taking my questions and congratulations on the good consistent delivery on margins. First of all, you mentioned more mainstream 5G associates also coming next year. Could you outline what is the timing? If I heard you right before we have it ready in Q2 next year results.
Could you also talk about, even for May stream 5g Associates, are you still going to maintain that kind of, price premium to comparable for products, and so the premium, obviously, you're expecting a meaningful price premium to the 4 gs compatible products. But when you get to mainstream 5G associates also, is the price premium still going to kind of sustain? And lastly, what are you seeing, from your competition? There's a lot of noise about Qualcomm trying to do RF bundling this year, as well as going into next year for their 5 g products, especially in China. What are you seeing and hearing from your clients on this?
And, how are you kind of trying to circumvent this?
Okay. I think for the timing for our product portfolio, I guess probably just the best way to describe our 5G product strategy. First of all, I think have more than one product. It's going to be a product portfolio, which covers different segments. We're starting the high end, but we were gradually as well, not gradually basically within the year as it would expand to different sectors.
But until exactly timing that I probably would not be able to disclose that yet. But during the trials call, we're kind of talking about a list, okay, a list one more product will come in, the first half next year. And, but in terms of other product timings, I probably, disclosures right now, but we would similarly disclose it is maybe it's not that early in next year. That would be, your first question on timing side. The second question will be on the, ASP side, I guess your question is, even for your question is for the mainstream product, for the mainstream 5G product, on the everyday book comparison, we don't now still see a ASP presence, compared to the 4 gs product.
I think the answer is, a short yes. Because overall, we see on the like for like comparison, what do we, by the like for us, actually, on the similar sectors, we all see a pretty good ASV questions, on 4 g versus 5 g, because simply put, in 5 g, we need to just put in a lot of new function of theirs. You're purely based on from the cost of material perspective, but Viasat's perspective is going to be, you know, need to be increased So it's, I think, physically, I've been losing a near term. There's no way we're going to sell on a similar ASP, not an ASP need to be higher on the like of like comparison. So for the ASP accretive, basically, on a like like basis across all different sectors that we all feel fairly comfortable, it should be a presence.
I think that's your question. I mean, the 3rd question is on iframe question. I, I think overall, currently, we didn't really but on the other hand, we work very closely with, all the different partners, which including but not limited to people like, often the, Cobo and all other like. And based on the current, so we're going to bolster our product portfolio and also run price, competitively perspective as a total solution, by working with our partner, even though we feel fairly comfortable with competing a lot of companies.
So, looks like 5G expectations have clearly gone up in China in terms of the volumes. So, David, I know that you don't want to volunteer exact market share expectation, etcetera. But when you say reasonable market share of that $100,000,000, what does that mean? A 10,000,000 number, a 10% number, is it a 30% number, like, could you give us a little bit more clarity about how you're thinking about it? Because sub 3000 RMB market, is kind of more mainstream.
And, you clearly have a reasonable share of that market in 4G. That's my first part. And second, could you also, talk a little bit about, getting down to sub-3000 RMB price range for 5g phones in second half next year. What is the kind of feedback you are receiving from your customers in terms of the to get down to that set of material without any carrier subsidies? Or do you feel that carrier subsidiaries that were essentials to get down to that kind of consumer price points?
Thank you.
I'll say the first question is with our view for our 5G market shares. I mean, internally, we do have a target, and we're looking pretty hard on it, but I don't think it's the right timing for us to just of it. I think we will, like, you know, transfer, you know, CEO talked about, we probably will kind of talk about it. Maybe either late this year or early next year. Because right now, there's still a lot of, sort of task of moving targets ongoing.
It may be a bit too short to talk about the market share right now. So that's your first question. The second question is, what's the sort of customer view and also what's the potential market's feedback for the 5 gs second would be pushing down to different segments, if you lower 3 1000 R and B. I think in general, so based on the feedback, we got those from the customer side, also found the, potentials and customer side. I think in general, there's, they are all fairly positive about that trend.
Even without a huge subsidy by the, China operators. But with the KBR, with the assumption, it's actually an customer willing to pay a little bit more, okay, for the 5G phone, okay? So if you're trying to sell a 5G phone with the same price at the G phone, I guess it's not going to happen. So I guess from the phone maker perspective, I guess what I view is, hopefully, with the 5 g phone, upgrade cycle, if like, they can actually somehow increase their ASP as well on on phone side, or at least make it increase, or change with a segment application. For example, maybe in the past, I'll just make it up, say, maybe 50% of the phone being under like a 1000 and 9 or maybe 1500 RMB sensors.
But now with the 5G phone, customer, we need to migrate from the 50 RMB 50 RMB 50 RMB 6022,000, maybe found it on the, I think that's the assumption if you like. But overall, I guess people feel, both, the customer and also the, the filmmakers are still positive about walking towards these directional assumptions.
Okay. Just one follow-up, David, on that, on the market share. If I ask the question a slightly different manner, do you feel more comfortable about your 5G volumes expectations for next year, given that the market prices have also gone up, I think, at cleaning up the year. I think you guys were expecting some 5G next year, but really I think mainstream hitting mainstream in 2021. That definitely seems to have pulled in by a significant margin.
So that also means that Mediatex phone, 5G, shipment, aspirations are also moved up in that same timeframe?
Again, unfortunately, to make a bit too mature, too early to talk about the regarding market share but, I guess, let me answer your questions, from a different perspective. I guess, without preparations, and especially for the bots from the product or for 5 g product portfolio perspective and also from the timing and performance perspective. I guess we do have a pretty high expectation on market share, okay? So we used to watch some market share, I guess, internally, the business now go
Okay. Okay. Got it. Yes. Thanks, David.
Thank you very much.
Next one, we're having Charlie Chan from Morgan Stanley. Go ahead please.
Thanks. Hey, David. So, back to near term trends, can you, give us some comparison of different segment growth in the quarter. I mean, for smartphone and also the growing segment, which part of the division is growing faster in secure?
I think in Q3, it's among the 3 product segments mainly mobile growth sector and also small related. I think that the one with the strong growth is really the mobile computing. The second one is really the growth sector. The last one is model related.
Okay. And then, can you give us some color about the a blended FB trend in 2Q and third quarter? Sure. Plenty lastly for smartphone in 2Q and 3Q.
I think for Sure. Q2 or for Q3? Both. Both. I think both for Q2 and Q3, we see a blended ASPs on the, on the increasing trend.
I think mainly due to, for Q2, we'll start to ship, P90. Q3, we will see more P90 coming in. And likewise, I think Q3 was starting to see some G90 update and from blended ASP perspective, they are all on the predictive side. But in terms of magnitude, right now, we didn't really disclose the magnitude of ASP.
Okay. Got you. And then on gross margin guidance, again, I mean, the midpoint of the guidance is at 41.5%. So again, it's kind of down slightly from 2Q actual margin. So any plagued in June?
Well, I think probably the fair comparison is if you compare it to the 2Q guidance versus the midpoint, kind of midpoint guidance versus a 3rd quarter midpoint guidance because, you know, like you say, as you know, sometimes the gross margin in the movie would change. So The guys are giving out 41.5 or Maypoint doesn't mean that's the target, right? It's after what we're going to see about the different dynamics. So again, I don't really think there's a signal of breaking about the gross margin S-one number 1. For number 2, actually, for the gross margin capital, like we talked about, like we explained in the beginning, right now, we have a free, rather balanced product portfolio and different product portfolio and different gross margin profiles.
So I guess, reaching a bench, what give us a guidance on gross margin within range is also need to take consideration about the potential difference to the revenue pie movement among different sectors. Overall, probably the best way to drive our view of our gross margin. I would say it's a steady, stable, and without, upside potential. Maybe there's a basebandwidth thing on that, put the actual numbers on.
Okay. And lastly, I think that question was already raised in Chinese call, right? But what was the thought about Huawei's share gain, they should kind of a gaining share quite aggressively in 2nd quarter that may continue in the second half, right? So how do you reconcile your very strong smartphone shipment growth in third quarter versus Huawei's market share expansion. And if there will be any risk of market share loss of your customers, would it be more like a fourth quarter or 3rd quarter risk?
Charlie, first of all, when I'm commenting about sort of the growth for 3rd quarters, I was commenting from a brilliant perspective, not exactly from a shipment perspective, because starting from, like I said, years ago, we start to provide the forward looking shipment number. So that's point number 1, is really the revenue growth. Point number 2, how do I reconcile that? I probably would not be able to compensate directly customer, if you ask me about Huawei, but, may maybe I'll explain it from, you know, take one step actually perspective is on the blended ASP side, it's increasing. And also on the market share side, we do believe on the trip on a addressable market perspective, we increased the addressable market.
We increased the market shares within the sensible market as well. And plus ASP of prices, I think this is the major drivers, for the revenue growth on a quarter over quarter basis.
Okay. One quick follow-up, right. So for that market share, again, do you think it is kind of related to the U. S.-China tension or is there something else that help you to keep growing your market share?
I think it's hard to contribute to one single factors. I guess maybe just a multiple factors. And, and also it's hard for me to quantify, front end of the sector. So I would say, I think on the combination of a strong product portfolio, I think getting more customer traction and also customer confidence, especially now we see our 4 gs product and also 5 gs products portfolio and plus the macro economic situations. It's really a combination of all those factors.
Next in line, Brett Simpson, Heritage Research. Go ahead please.
Yes, thanks very much. David, I just wanted to get your perspective, if you go back to, 2014, when China Mobile launched 4G, within the 1st 12 months, they pulled an 100,000,000 subs. So quite an aggressive, ramp from China Mobile in the start of 4G to 4G. How do you think the sort of launch of 5G plays out for them? Do you think they're going to be more aggressive, and just wanted to get your perspective on how the sort of relative ramp up might play out for China Mobile?
Currently, Brad, currently, our views will be, either similar, like the 4 gs ramp up, and maybe even slightly faster. That's our current based on, our competition with, all related parties. So, but based on what I would say will
be on a similar fashion at least.
Interesting. Okay. Thanks for that. And then just from an ASP per perspective, if you look at, if you look at 5G versus 4G on a sort of like for like basis, what do you think the premium that media tech debts, selling a 5g device at the same handset price point versus 4g.
So when you said Premier talked about, like 4g versus 5g GSV is all it means.
Yes, exactly.
Again, it's hard for me to quantify that. But let me answer your question from this one. Okay. I mean currently, if you're charging from our competitors age, price quotation. It's actually, it's, again, it's a dual solution for this year.
It's really just a baseband plus a load is there an E based on plausible that's, again, the ASC right now is actually, it's a 3 digit, but it's a $100 plus. And getting the SOC, I think the number will be lower. It would not be 3 digit, but overall, I guess, currently, people are still looking for the list of $50 kind of to start with the high end. And by in terms of what's the final numbers, again, it's a movie target, but overall, I mean, it's, people are overly 5G especially with 9 products to be, should be a pretty high speed, versus our current ASR on the 4G side. Because on the 4G, we don't have high end product, our product, a 1,000,000 on the mainstream and also on the level, I think the blended ASV, let's just take a range, say, $10 to $13 or $15.
If you use this range versus the 5 gs, I think it should be a pretty good AFP pressure.
Great. That's helpful. And is your expectation going to see aggressive handset subsidies in China next year to try to stimulate the market, to adopt 5G.
I currently, we don't have video visibility for the handset subsidy. And so I believe actually for next year, they will have some, maybe, don't need to wait for next year, maybe, in the next few quarters, but we'll see, operators all female media operators put together some kind of incentive or subscribe programs. Currently, you don't have a serviceability yet.
Okay. And then just on 5G customers, are planning to sell to Huawei? I mean, do you have, design wins with Huawei for 2020 and 5G?
I was not be able to commentating on the customer side, but, in general, I guess, currently, 4G product, 4G customer, they all are potential 5G customers. But currently, I would not be able to comment in our 5G customers,
Okay. Okay. And then maybe just switching gears a little bit to the PMIC business. You mentioned in your prepared remarks that PMIC is starting to ship into smartphones. Can you give us a sense as to how big that business is today.
So what typical penetration are you seeing for the PMIC when you sell, smartphone ships today? And how do you think plays out over time?
1st of all, for the PMIC business, they are 4 major segments out there, which is the computing display, mobile related and also, AC to DC converter. And, normally, we don't break down, especially for mobile. So when I was talking about PME, I'm talking about all sector altogether. I mean, all 4 tech sector altogether, right now, for this year, it's not just any given quarter for full year, our view is roughly probably will come for close to 10% of our revenue. And in terms of growth rate year over year, as we're looking for double digit year.
For next year's, again, too early to tell, at least for this year and over the last years, they've been all being gross double digit. Okay.
That's great. And just same division at Wi Fi. So I think you've mentioned earlier that you plan to start shipping Wi Fi Six in Q1 next year. Is that still the case? And what sort of pricing premium do you get for Wi Fi Six versus your typical Wi Fi AC today?
You could give a sense for that transition if it's going to happen.
I think for Wi Fi to ask, yes, I think that's still the plan. It was not a ship to plan, I think the product actually will be ready this year. We will start the ship next year. In terms of ASVs, I probably, don't have the detail of a right now, I mean, it will be higher than for sure, but in terms of the magnitude, I guess, again, it's still, it's evolving right now. We probably will not be able to provide detailed information.
For this,
Okay. Okay. And then just maybe final question on Avix. So I guess your consumer Avix business today is more around, dimcom and there's a big upgrade in game console for next year coming. Can you talk a little bit about that, what that means for MediaTech?
And then on the enterprise side, help us understand how the ramp of that opportunity. I think you mentioned multiple design wins on ASICs or enterprise. Can you help us sort of how this might translate to, revenues in 2020?
For this year and also for next year as well, I would say, majority of the asset revenue probably will still be consumer side, I see the, the gaming stations, the 2 major platform and also, top related product. Even though we're starting to ship out enterprise asset side starting from this year. Our view is for next year, I think, in terms of revenue contributions, if I corner that as a percentage of overall revenue, it's going to be still very low, low single percentage, if you like. I think that on the building contribution side. But in terms of, the potential market size or potential addressable market, maybe that's the better we just write that.
We believe that actually based on the occurrence, technology we have and also, based on the current FK these areas, we should be talking about, close to 2,000,000,000 addressable market. And the good news is actually that address our case to be growing, as well, given the fact that actually ran out, it was just craving for more and more data. The much faster transmission to be high resolutions, the accountants, when you put all those together, so I guess right now, there's a consumer to pick on the data, crazy, for that. And that would translate into more and more demand, for the enterprise asset side. Brian, you're always about bringing it down.
So maybe you need to repeat again because we can't really hear your question at all.
I think corporate average gross margins can be on the gross margin opportunity here. Could it sounds like this might be an accretive story for the business overall, but just wanted to get their sense for that.
Sorry, actually, for some reason, your boys are breaking out. Can you just repeat your question again?
Yes. So just looking at all the new products you have here, we mentioned Wi Fi Six and 5G and TMX ramping up and ASICs, etcetera. Are these new product areas all higher than corporate average gross margins from Mediatek?
I think in general, again, because now those products are shipped yet, So there is the, again, it's still a movie target, but in general, we're looking for, should be similar if not higher. But again, like I say, I think for Wi Fi product, probably, it's relatively common because the trend is more clear. 5G right now is a pretty heated the base and it was, like, pretty heated the competition out there. So in terms of final gross margin, we still need to wait for second half of this year to finalize that. But in general based on currently your variable information should be better.
But again, when I was once ASV profile, it looks like, once we get into that's the gap this year.
Next one, to ask questions, Gokulhadialand JPMorgan.
Margin. I think we've done a very good job in the last few years of improving the gross margin pretty steadily. How should we think about further for gross margin and then kind of tagging along to Brett's previous question, should we expect that gross margin improvement from here on is on going to be that big? I think you're probably going to stay around these levels. At the same time, could you also talk a little bit about operating margins given that you gave 10% operating margin after quite some time and some operating leverage is starting to come through.
Next year, obviously, you're expecting revenues to, looks like revenue growth is likely to happen with 5G and some basic products also coming through. So could we talk a little bit about the operating margin dynamics as well?
Well, I think for operating margins for Q2, as you can see right now, we get back to like 10 percent. In the last, few years of multiple quarters, our operating margins are below 10%. Think our overall goal, in last 2 years or for next 2 years, we're initially trying to improve the profitability. And when we talk about profitability, again, it's really just both around the gross margin and also operating margin perspective. In the last two years, or 4 or 6 quarters, I think the major focus will be increased to gross margin because we come out from a relatively low pace.
But once we get into 40 17, I would say, even though there's still room to grow, but, in terms of the pace will be, or the growth pace, will be much more slower compared to what we had in the last few years, but it doesn't mean, there's no room, to improve. But again, I mean, for when I answer this question. But neither to indicate, we will continue to see quarter over quarter growth of improvement on the gross margin example, our gross margin themselves need to do with our product portfolio or product mix, every quarter is different. So, in the last few quarters, all rising trend, but doesn't mean the next few quarters, you can always stay the trend, especially on a quarter over quarter basis. But if we focus on year over year perspective, if you just lens an observation window, I guess, we still feel comfortable to see some growth year over year as on the gross margin side.
But move down to the operating margin side, I guess, what we really trying to push in the last 2 years, most of the next few years, it should be the operating margin improvement. Like what we explained earlier, for the last year, the operating margin especially operating margin dollar grow, I guess, more than 50%. This year, I guess, overall, we're looking for 20%, 30% operating margin dollar improvement. Next year, we don't have the view yet, but I guess, hopefully, it will be the similar, fashion because, if you do the math, as long as we can somehow grow the revenue in the top line even at a mild 3% to 5%, very much, actually, the last 2 years, our top line pretty much remains the same, right? But if we can somehow grow, even for a low single digit growth revenue next year due to the new product portfolio, which including, but not limited to 5G, I guess, the translations or trickle down to operating margin should be still quite sizable.
So this is how we're trying to drive, our overall business. For the last 2 years, otherwise, the next few years as well. Unfortunately, I probably would not be able to give out as good a guidance or a few or targets for that other things people kind of like explaining that number. So I guess that's something we probably would not be able to provide right now.
Right now, we're having Randy Abrams Credit Suisse. Go ahead, please.
Okay. Yes. Thank you, David. I just had 2 follow-up questions. One on the consumer, I think just following up on Brett's comment or question.
For the new upcoming gaming cycle. I just want to see if you can comment if you expect to maintain the existing two platforms. And at this stage, if you view it as stable content or could be start where you could see some increase in that business.
Randy, what do you mean studies?
Yes, just for the consumer, I think if you expect because you've had those platform wins, if you expect to maintain with the upcoming game console refresh your market share and from a value you provide if there's room to increase the value or content you provided to those game consoles?
I see. I think for the consumer products or game consoles, I think overall, we probably need to way for this with a new product coming in, I actually say, the customer new product cycle, because normally when the new product cycle comes in, we actually have the opportunity to win more sockets. For the current product, I guess, this is what it is. It's probably relatively stable, but internally increased the market shares normally we have the chance to win or lose depending on how you see it, when there's a new product coming out, the new product on the customer side. But overall, on the current design wins situation.
We feel comfortable. We still we should be able to still continue to grow, I think, our consumer side as business.
Okay. And the last one, I just wanted to ask about this G90 as the new product you launched. If you've seen anything on sizing or customer interest, what type of category, what remain niche and very low volume, or do you have any expectations for this new category were accretive if it's higher ASP?
Well, 1st of all, actually, it's a G90s, gaming, I want to say the gaming platform is actually not one of our platform, especially junior performers, for game related performance, And, but very minorly, so one of the key features or investigations, if you like, for the smartphone, usually getting We're trying to, you know, some people play it high again. Some people play the social game, but again, it's actually locked and made a load frequently used and a very popular locations out there. So, our view with actually GYNI is, is good for high end gaming form as well as for honest, it's in a general form, even you played against, you know, occasionally. And so that's why we say the G90 is not designed as a niche product, usually a product with a niche features, if you like, a niche performance, but it's actually designed for game engine phone plus the general price as well. So, we still, I think, overall, we do believe actually G90s and also P90s as well.
It's actually really 2 of our 4G, major product that the build up product should be able provide reasonable returns for us.
Okay. And do you have any feel on traction or design win momentum at this time, like since it just launched, but it's getting adopted across your customer base?
I think the adoption is actually pretty well. I think right now it's actually today is the end of July, right? I think so within the models, you should be able to see, some of our customers announcing their products, you know, the go to market, play So it's actually designed and designed way is actually proven.
Ladies and gentlemen, we thank you for your questions. Now I'll hand it over to Mr. Zheng for closing comments. Please proceed.
Ladies and gentlemen, this concludes MediaTek 2019 second quarter conference call. We'd like to thank you for your participation. You may now disconnect.