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 December 18, 2000
Motorola and Eastcom To Develop 2.5G Cellular Phone for China Market

 Motorola's Semiconductor Products Sector, working with Motorola's Personal Communications Sector, has signed an agreement to deliver advanced wireless chips and design expertise to the mobile phone market in China. Motorola, currently the No. 1 supplier of wireless phones in China, plans to work with Eastern Communications Co. Ltd. (Eastcom), a leading manufacturer of mobile communications products, and the China Integrated Circuit Design Center (CIDC), to develop an advanced, 2.5 Generation (2.5G) GSM/GPRS handset for the China market.

Under this agreement, Motorola has agreed to license its DigitalDNA(TM) solutions for GSM phone platform and GSM baseband chipset, including language displays, ringers and protocol stack software, to Eastcom to develop a unique phone handset for the Chinese market. Additionally, Motorola expects to conduct training - phone platform training in Hangzhou and integrated circuit (IC) design training in Beijing. Motorola will manufacture the semiconductor solutions.

Licensing the baseband design technology will allow CIDC and Eastcom to differentiate products by integrating their own intellectual property (IP) in the design of the baseband IC. Motorola plans to offer Eastcom other capabilities from their wireless portfolio, including RF-IF ICs, Power Management ICs and additional semiconductor IP including Bluetooth technology.

This joint development is strongly supported by the China Ministry of Information Industry and is considered a milestone of semiconductor design and software development for China.

"Our alliance with Eastcom and CIDC is a milestone in Motorola's history of supplying wireless chipsets and systems to leading communications manufacturers. We are pleased that this key platform architecture for GSM phones is being adopted in China through our partnership with Eastcom, and we look forward to a long relationship," said Peter Shinyeda, corporate vice president and general manager, Motorola's Wireless Subscriber Systems Group.

"We have been working with both Personal Communications Sector and Semiconductor Product Sector to bring Motorola solutions to the Chinese wireless phone handset market. With this agreement, Motorola will further strengthen our position in providing our China mobile phone customers with one-stop shopping for software and hardware technologies, specifically to Eastcom," said K.P. To, vice president and general manager, Motorola's Chipset Software Solutions Operation.

According to the contract, the alliance will design and produce its first 2.5G GSM (GPRS) handset with independent IP in the next 18 months. The handset is expected to feature high-speed Internet access functionality. The core IC design expertise will assist in the development of future mobile products and help to continuously improve China's mobile communication technology.

"At the door of the World Trade Organization, we feel the pressures of opening the telecommunication market, as well as the intense competition," said Mr. Shi Jixing, chairman of the board of Eastcom. "Eastcom's collaboration with Motorola's Semiconductor Products Sector and China IC Design Center will provide a complete breakthrough for IC design of handsets and independent core software development, accelerating the upgrade of our technology and products."

"This project can give an extreme boost to the level of Large Scale Integrated circuit (LSI) design of China," said Ms. Wang Qingsheng, president of the China IC Design Center. "Motorola is a leader in the embedded systems solutions. Eastcom and China IC Design Center can be supported by Motorola to upgrade the level of China's communication industry."

According to the China Ministry of Information Industry (MII), technology innovation, cellular subscriber growth and replacement rates of existing phones will drive the cellular handset opportunity in China. MII forecasts that China subscriber growth is expected to grow from 68 million in 2000 to nearly 250 million in 2004. About Eastcom