DELAWARE		77-0473640
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification Number)

PART I.		FINANCIAL INFORMATION		Page No.
Item 1.		Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001		2
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2002 and 2001		3
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2002 and 2001		4
		Notes to Condensed Consolidated Financial Statements		5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		33
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings		35
Item 2.		Changes in Securities and Use of Proceeds		37
Item 3.		Defaults Upon Senior Securities		37
Item 4.		Submission of Matters to a Vote of Security Holders		37
Item 5.		Other Information		38
Item 6.		Exhibits and Reports on Form 8-K		38
Signatures				40

		June 30, 2002				December 31, 2001
Assets
Current assets:
Cash and cash equivalents		$	92,348			$	92,633
Short-term investments			101,189				115,488
Accounts receivable, net			180				510
Inventories			6,146				6,208
Income tax receivable			166				527
Prepaid expenses and other current assets			1,470				1,146
Total current assets			201,499				216,512
Property and equipment, net			2,254				3,068
Long-term investments			28,230				26,562
Restricted cash			3,639				3,639
Other assets			—				24
Total assets		$	235,622			$	249,805
Liabilities and stockholders’ equity
Current liabilities:
Current obligations under capital leases		$	—			$	41
Accounts payable			431				533
Accrued compensation and benefits			1,014				1,077
Other current liabilities and accrued expenses			2,880				3,512
Deferred revenue			416				177
Total current liabilities			4,741				5,340
Accrual for loss on operating lease, long-term portion			1,126				1,576
Other long-term liabilities			—				68
Total liabilities			5,867				6,984
Stockholders’ equity:
Convertible preferred stock, $.001 stated value, 5,000 shares authorized; none issued and outstanding at June 30, 2002 and December 31, 2001			—				—
Common stock, $.001 stated value, 200,000 shares authorized; 65,807 and 65,643 shares issued and outstanding at June 30, 2002 and December 31, 2001, respectively			66				66
Treasury stock, at cost			(7,946	)			(3,554	)
Additional paid-in capital			311,354				311,163
Deferred stock compensation			(1,186	)			(2,516	)
Accumulated other comprehensive income			599				842
Accumulated deficit			(73,132	)			(63,180	)
Total stockholders’ equity			229,755				242,821
Total liabilities and stockholders’ equity		$	235,622			$	249,805

		The Three Months Ended June 30,								The Six Months Ended June 30,
		2002				2001				2002				2001
Net revenues:
Product revenue		$	592			$	3,417			$	858			$	8,790
Service revenue			381				1,193				778				2,390
Sales returns reserve adjustment			—				—				167				—
Total net revenues			973				4,610				1,803				11,180
Cost of revenues:
Cost of product revenue			285				2,692				467				5,043
Cost of service revenue			86				323				186				944
Write-down of inventory			—				35,019				—				35,019
Provision for purchase commitments			—				2,666				—				2,666
Total cost of revenues			371				40,700				653				43,672
Gross profit (loss)			602				(36,090	)			1,150				(32,492	)
Operating expenses:
Research and development (exclusive of non-cash compensation expense of $244 and $475 for the three months ended June 30, 2002 and 2001 and $561 and $1,061 for the six months ended June 30, 2002 and 2001, respectively)			3,588				7,057				7,115				13,490
Sales and marketing (exclusive of non-cash compensation expense of $130 and $188 for the three months ended June 30, 2002 and 2001 and $312 and $502 for the six months ended June 30, 2002 and 2001, respectively)			2,152				5,070				4,317				9,662
General and administrative (exclusive of non-cash compensation expense of $176 and $254 for the three months ended June 30, 2002 and 2001 and $412 and $562 for the six months ended June 30, 2002 and 2001, respectively)			766				1,238				1,460				2,682
Amortization of intangible assets			—				403				—				807
Amortization of deferred stock compensation			550				917				1,285				2,125
Total operating expenses			7,056				14,685				14,177				28,766
Operating loss			(6,454	)			(50,775	)			(13,027	)			(61,258	)
Interest income and other, net			1,492				3,056				3,089				7,087
Loss before income tax			(4,962	)			(47,719	)			(9,938	)			(54,171	)
Income tax expense (benefit)			(91	)			3,460				14				3,461
Net loss		$	(4,871	)		$	(51,179	)		$	(9,952	)		$	(57,632	)
Basic net loss per share of common stock		$	(.08	)		$	(.83	)		$	(.16	)		$	(.94	)
Diluted net loss per share of common stock		$	(.08	)		$	(.83	)		$	(.16	)		$	(.94	)
Weighted-average shares of common stock outstanding used in computing basic net loss per share			63,283				61,829				63,424				60,999
Weighted-average shares of common stock outstanding used in computing diluted net loss per share			63,283				61,829				63,424				60,999