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

PART I.    FINANCIAL INFORMATION				Page No.
Item 1.		Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001		2
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2002 and 2001		3
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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		11
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		35
Item 4.		Controls and Procedures		36
PART II.    OTHER INFORMATION
Item 1.		Legal Proceedings		37
Item 2.		Changes in Securities and Use of Proceeds		40
Item 3.		Defaults Upon Senior Securities		40
Item 4.		Submission of Matters to a Vote of Security Holders		40
Item 5.		Other Information		40
Item 6.		Exhibits and Reports on Form 8-K		40
Signatures				42
Certifications				43

		September 30, 2002				December 31, 2001
Assets
Current assets:
Cash and cash equivalents		$	110,076			$	92,633
Short-term investments			73,040				115,488
Accounts receivable, net			241				510
Inventories			5,796				6,208
Income tax receivable			10				527
Prepaid expenses and other current assets			1,205				1,146
Total current assets			190,368				216,512
Property and equipment, net			1,834				3,068
Long-term investments			34,876				26,562
Restricted cash			3,639				3,639
Other assets			—				24
Total assets		$	230,717			$	249,805
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	585			$	533
Accrued compensation and benefits			1,059				1,077
Other current liabilities and accrued expenses			2,632				3,512
Deferred revenue			395				177
Current obligations under capital leases			—				41
Total current liabilities			4,671				5,340
Accrual for loss on operating lease, long-term portion			901				1,576
Other long-term liabilities			—				68
Total liabilities			5,572				6,984
Stockholders’ equity:
Convertible preferred stock, $0.001 stated value, 5,000 shares authorized; none issued and outstanding at September 30, 2002 and December 31, 2001			—				—
Common stock, $0.001 stated value, 200,000 shares authorized; 65,757 and 65,643 shares issued and outstanding at September 30, 2002 and December 31, 2001, respectively			66				66
Treasury stock, at cost; 2,360 and 1,199 shares at September 30, 2002 and December 31, 2001, respectively			(7,946	)			(3,554	)
Additional paid-in capital			311,356				311,163
Deferred stock compensation			(763	)			(2,516	)
Accumulated other comprehensive income			495				842
Accumulated deficit			(78,063	)			(63,180	)
Total stockholders’ equity			225,145				242,821
Total liabilities and stockholders’ equity		$	230,717			$	249,805

		The Three Months Ended September 30,								The Nine Months Ended September 30,
		2002				2001				2002				2001
Net revenues:
Product revenue		$	707			$	287			$	1,565			$	9,077
Service revenue			351				431				1,129				2,821
Sales returns reserve adjustment			—				—				167				—
Total net revenues			1,058				718				2,861				11,898
Cost of revenues:
Cost of product revenue			388				103				855				5,146
Cost of service revenue			91				207				277				1,151
Write-down of inventory			75				—				75				35,019
Provision for purchase commitments			—				—				—				2,666
Total cost of revenues			554				310				1,207				43,982
Gross profit (loss)			504				408				1,654				(32,084	)
Operating expenses:
Research and development (exclusive of non-cash compensation expense of $184 and $356 for the three months ended September 30, 2002 and 2001 and $745 and $1,417 for the nine months ended September 30, 2002 and 2001, respectively)			3,947				5,331				11,062				18,821
Sales and marketing (exclusive of non-cash compensation expense of $104 and $142 for the three months ended September 30, 2002 and 2001 and $416 and $644 for the nine months ended September 30, 2002 and 2001, respectively)			1,866				3,606				6,183				13,268
General and administrative (exclusive of non-cash compensation expense of $137 and $217 for the three months ended September 30, 2002 and 2001 and $549 and $779 for the nine months ended September 30, 2002 and 2001, respectively)			640				1,127				2,100				3,809
Amortization and write-off of intangible assets			—				7,501				—				8,308
Amortization of deferred stock compensation			425				715				1,710				2,840
Provision for loss on operating lease			—				2,702				—				2,702
Total operating expenses			6,878				20,982				21,055				49,748
Operating loss			(6,374	)			(20,574	)			(19,401	)			(81,832	)
Interest income and other, net			1,507				2,334				4,596				9,421
Loss before income tax			(4,867	)			(18,240	)			(14,805	)			(72,411	)
Income tax expense			64				29				78				3,490
Net loss		$	(4,931	)		$	(18,269	)		$	(14,883	)		$	(75,901	)
Basic net loss per share of common stock		$	(.08	)		$	(.29	)		$	(.24	)		$	(1.23	)
Diluted net loss per share of common stock		$	(.08	)		$	(.29	)		$	(.24	)		$	(1.23	)
Weighted-average shares of common stock outstanding used in computing basic net loss per share			62,736				63,272				63,188				61,757