The revenue and operating income for the Digital Enterprise Group (DEG) for the three years ended December 27, 2008 were as follows:

Net revenue for the DEG operating segment decreased by $672 million, or 3%, in 2008 compared to 2007. Microprocessors within DEG include those designed for the desktop and enterprise computing market segments as well as embedded microprocessors. The increase in microprocessor revenue was due to higher enterprise microprocessor average selling prices and higher embedded microprocessor unit sales, partially offset by lower desktop microprocessor unit sales. The decrease in chipset, motherboard, and other revenue was primarily due to lower motherboard unit sales and lower revenue from the sale of communications products. In addition, lower chipset average selling prices were partially offset by higher chipset unit sales.

Operating income increased by $1.2 billion, or 22%, in 2008 compared to 2007. The increase in operating income was primarily due to lower desktop microprocessor and chipset unit costs. Lower start-up costs of approximately $350 million and lower operating expenses were partially offset by sales in 2007 of desktop microprocessors that had previously been written off and higher write-offs of desktop microprocessor inventory in 2008.

For 2007, net revenue for the DEG operating segment increased by $619 million, or 3%, compared to 2006. The increase in microprocessor revenue was due to higher microprocessor unit sales and higher enterprise average selling prices. These increases were partially offset by lower desktop average selling prices in a competitive pricing environment. The decrease in chipset, motherboard, and other revenue was due to lower motherboard unit sales as well as a decrease in communications infrastructure revenue, which was primarily due to divestitures of certain communications infrastructure businesses that were completed in 2006 and 2007. Partially offsetting these decreases was higher chipset revenue.

Operating income increased by $2.0 billion, or 61%, in 2007 compared to 2006. The increase in operating income was primarily due to lower desktop microprocessor unit costs and lower operating expenses, and to a lesser extent, sales of desktop microprocessor inventory that had been previously written off. Partially offsetting these increases were higher chipset unit costs and approximately $500 million of higher start-up costs, primarily related to our 45nm process technology. In 2007, we began including share-based compensation in the computation of operating income (loss) for each operating segment and adjusted the 2006 operating segment results to reflect this change.