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Dear Mr. XXX, and YYY friends,

I believe all of you have already known the disappointing result from YYY,
and also double
confirmed with YYY.

If we recall what happened…

Admittedly, it is very rush for us, both sides, to respond to a proposal
request from YYY
within couple of days after May 8th meeting with YYY, we did our best to
support YYY to come up
with the final proposal which we couldn't see, and is commented by YYY
people as 'high NRE, and
handset unit price'.

But it's also our bad that we didn't track and follow YYY closely enough to
detect the imminent
business opportunity.

Based on my follow-up conversation with YYY, there're two ODM vendors
competing for this project.
Both ODMs have similar capability of delivering TD-SCDMA handset within five
months, which is
YYY's requirement for this gap-filler product after Commit went meltdown
suddenly - It's also a
surprise for YYY. So time is the essence. When YYY is confronted with two
solutions/proposals
of similar deliverable capabilities, but with significant cost difference,
they tend to choose more
cost-effective one. This is the message conveyed by YYY.

But for us, we do need to sit down and analyze 'Why we didn't win' from all
perspectives … i.e.
demotivated ODM partner, quotation approach (combined HW/SW), close customer
tracking and
communication, …

From YYY side, their feedback (XXX) is not 'high NRE, or unit price', but
our solution
maturity/stability and technology leadership, i.e. HSDPA, TDD/EDGE…which is
also an understandable
excuse. On the other hand, it also somehow coincides with YYY's comment
about lousy TDD phone in
the market. Obviously, the buggy TDD from our customers didn't bring good
impression to YYY, and
contradicts to our repetitive statement of mature and stable solution.

I also discussed with both XXX and Dr. XXX afterwards, and explore their
business and
technical strategies on TD-SCDMA. The picture doesn't look to us, fellows.
First of all, from
business side, YYY is neither aggressive, nor active, even mentioning about
2nd generation TDD
product from YYY. They claim they'd track this opportunity, but for the time
being, it's not
urgent, and they have higher priority task to accomplish versus YYY, they'd
expect some decision
for 2nd generation product within couple of months, if not earlier.

From technical side, Dr. XXX spreads even more conservative or negative
signal, and claims that
YYY won't be too aggressive on TD-SCDMA including R&D focus, new platform
licensing i.e.
HSDPA, among others, unless a key customer like YYY or YYY requests for it.
So YYY is passively
waiting, but not aggressively fight for TD-SCDMA ODM biz opportunity of this
kind.

This attitude just won't fly, even though Dr. YYY said he'd keep Tristan
project running, but not
their focus.

Of course, we, both YYY and YYY, won't let it be, and must keep re-
motivating YYY to approach
YYY TDD opportunity, but we also need a solid Plan B in the case of ODM
partner, i.e. YYY.
Even YYY or YYY looks OK now. At this point, YYY doesn't look likely to us.

From YYY side, it's confirmed that we didn't get the 1st generation product,
but also suggested
that 2nd generation product is coming to the stand for decision in couple of
months, or earlier.
So let's focus on this one in the months to come.

Now please be noted that we're requested to submit a proposal comprising of
both commercial and
technical info to YYY directly as soon as possible to go after YYY's 2nd
generation TD-SCDMA
handset ODM opportunity. With regard to this proposal, the rough
requirements are as follows,

>> Commercial
HW & SW business proposal (quotations of IC, SW royalty, NRE, ...), and
according to YYY people,
a HW & SW combined one will be preferred. Plus, they want us to address the
question of IPR,
not limited to TDD, but any 3rd party technology licensing, or sublicense to
make sure there'd
be no IP infringement.

>> Technical
IC, SW, solution, upgrade plan and etc. Plus, they need solution delivery
timings exactly,
and they want a safe upgrade plan, instead of looking through crystal ball.

For this part, YYY people will play a big role to evaluate all aspects of
our solution.
My colleague, YYY, will help deal with YYY and get us sync.

Obviously, my outline about YYY's proposal request is not enough at all.
So we need to discuss with YYY further on those details to make sure our
offering in near future
will meet their requirements exactly and precisely.

Let's work closely together to win YYY's 2nd generation product which is
more influential and
speaks for much higher volume throughout 2009/2010!

We must win this!!

Best Regards,