3. Balance Sheet Details

Marketable Securities

The Company's portfolio of available-for-sale securities by contractual maturity consists of the following (in thousands):

		$00,000		$00,000		$00,000			$00,000		$00,000
September 30, 2011	Maturity in Years		Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Available-for-sale:
Corporate debentures / bonds		1 or less	$	23,333	$	(17	)	$	0	$	23,316
Municipal bonds		1 or less		3,287		(2	)		0		3,285
Certificates of deposit		1 or less		2,640		0			7		2,647
Government agency securities		1 or less		4,106		(1	)		0		4,105
Marketable equity securities		N/A		38		0			0		38

Total short-term marketable securities				33,404		(20	)		7		33,391

Available-for-sale:
Government agency securities		1 to 2		7,932		(21	)		0		7,911
Muncipal bonds		1 to 2		1,189		0			1		1,190

Total long-term marketable securities				9,121		(21	)		1		9,101

			$	42,525	$	(41	)	$	8	$	42,492

		$00,000		$00,000		$00,000			$00,000		$00,000
December 31, 2010	Maturity in Years		Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Available-for-sale:
Corporate debenture/bonds		1 or less	$	33,356	$	(3	)	$	31	$	33,384
Municipal bonds		1 or less		5,259		(4	)		0		5,255
Certificates of deposit		1 or less		925		0			0		925
Government agency securities		1 or less		20,207		0			4		20,211

Total short-term marketable securities				59,747		(7	)		35		59,775

Available-for-sale:
Corporate debenture/bonds		1 to 2		8,808		(14	)		0		8,794
Certificates of deposit		1 to 2		2,397		0			6		2,403
Government agency securities		1 to 2		9,478		0			1		9,479

Total long-term marketable securities				20,683		(14	)		7		20,676

			$	80,430	$	(21	)	$	42	$	80,451

The Company's available-for-sale securities are carried on the Consolidated Balance Sheet at fair market value with the related unrealized gains and losses included in accumulated other comprehensive (loss) income on the Consolidated Balance Sheet, which is a separate component of stockholders' equity. Realized gains and losses on the sale of available-for-sale marketable securities are determined using the specific-identification method.

As of September 30, 2011, the Company had a net unrealized loss of $33,000 in accumulated other comprehensive (loss) income. The Company's net unrealized loss is the result of market conditions affecting its fixed-income, debt and equity securities, which are included in accumulated other comprehensive (loss) income on the Consolidated Balance Sheet for the period then ended.

As of September 30, 2011, the Company's investment portfolio included $385,000 of marketable equity securities at original cost, with a fair value of $38,000. These securities are currently traded on the Over the Counter Bulletin Board (OTCBB) and are not traded on major exchanges such as the New York Stock Exchange. During the three and nine months ended September 30, 2011, the Company recorded an other-than-temporary loss of $193,000 and $347,000, respectively, within other income (expense), net in the Consolidated Statement of Operations.

Inventories

Inventories consist of the following (in thousands):


	September 30, 2011		December 31, 2010
Finished goods	$	43,259	$	36,764
Raw materials and components		5,890		6,330

	$	49,149	$	43,094

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	September 30, 2011		December 31, 2010
Royalties	$	6,201	$	6,461
Payroll and related expenses		6,985		5,704
Product warranty		1,729		2,279
Market development fund and price protection		1,646		1,452
Deferred rent		1,099		1,092
Professional fees		910		1,103
Other		9,048		7,959

	$	27,618	$	26,050

Accrued Warranty Obligations

Accrued warranty obligations consist of the following (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Warranty liability at beginning of period	$	1,709		$	2,467		$	2,279		$	3,039
Additions charged to operations		1,035			262			2,238			1,014
Deductions from liability		(1,015	)		(649	)		(2,788	)		(1,973	)

Warranty liability at end of period	$	1,729		$	2,080		$	1,729		$	2,080

The Company accrues warranty costs based on estimates of future warranty-related replacement, repairs or rework of products. The Company generally provides one to three years of coverage for products following the date of purchase and the Company accrues the estimated cost of warranty coverage as a component of cost of revenues in the Consolidated Statements of Operations at the time revenue is recognized. In estimating our future warranty obligations we consider various relevant factors, including the historical frequency and volume of qualifying claims, and the cost to replace or repair products under warranty.