As we said when we announced preliminary results, softness in CE was primarily due to anticipated declines in ACP revenues, which we've been talking about for a number of quarters now. Remaining decline was mostly due to the lack of new CE licensing deals during the quarter. But we had hoped to sign at least one of the CE manufacturers that is out of license. It did not happen in the quarter for reasons Tom will discuss. By comparison, in the second quarter of 2011, we've benefited from entering into a license agreement with Toshiba.
Our CE products were also adversely impacted by the macroeconomic factors that appears have been headwinds for many companies involved with the CE industry. Many device manufacturers reported a year-over-year reduction in royalty-bearing unit sales, and some of our CE partners have been incorporating next-generation guides more slowly than we anticipated.
Additionally, activations for connected devices are not meeting either our expectations or, we understand, expectations of the device manufacturers. We believe the lower-than-expected activations also reflect the macro environment as CE device makers are not currently making the kind of investments in marketing that would encourage consumer awareness and activation. As a result, our anticipated advertising revenues were impacted by the resulting smaller-than-anticipated guide footprint in CE.
Additionally, DivX revenues, while slightly up on a year-over-year basis, did not grow as anticipated. DivX growth was impacted by the CE industry's headwinds, as well as by delays in our rolling out new content creation solution software. We are actively addressing such delays as Tom will discuss.Read the rest of this transcript for free on seekingalpha.com
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