CIDCO to Enter Voice Over Internet Protocol Market Using Netergy Technology; CIDCO Teams With IP Telephony Leader Netergy Networks To Develop Line of IP Telephones.

Business Editors/High-Tech Writers

MORGAN HILL, Calif.--(BUSINESS WIRE)--June 12, 2000

CIDCO Incorporated (NASDAQ:CDCO), a worldwide leader in telephony and Internet appliances, announced today its intent to enter into the voice over Internet protocol (VoIP) market space and partner with Netergy Networks, Inc., (Nasdaq:NTRG), a leading provider of Internet Protocol (IP) telephony solutions, to develop a line of IP telephones based on the Netergy Audacity-T2 IP Phone Processor and Veracity VoIP Embedded Software.

CIDCO will use the Audacity-T2 processor to make a variety of IP telephones that will be compliant with the three industry standard protocols for VoIP, H.323, MGCP and SIP, used by major data networking companies offering VoIP equipment today. When used with network software such as the Netergy iPBX Server Software, or other iPBX's offered in the market today, CIDCO's IP telephones will allow businesses to replace traditional circuit-switched PBX's or Centrex service with more efficient, feature rich IP telephone systems. On a cost-per-extension basis, such systems can be as much as 25 percent less expensive than circuit-switched solutions, and these systems make a variety of new features possible, including find me/follow me, unified messaging and seamless telecommuting while delivering standard PBX features. With CIDCO's experience developing the first e-mail Internet Appliance of its kind, the MailStation and also developing the first appliances for the World Wide Web, as well as Caller ID devices and advanced phones, CIDCO is well positioned to deliver a cost-effective, feature rich IP telephone product by the end of the year.

Industry Leaders Empower IP Telephony Solutions

"CIDCO will target developing markets such as the one for IP telephones with products that provide industry-leading features," said Mark Jensen, director of product management for CIDCO products. "As a key player in the convergence of voice and data networks, Netergy Networks was a natural choice. Together our experience in designing and building CPE (customer premise equipment), we have the expertise required to address this new market with an end-to-end IP telephony solutions for enterprises."

There are several applications for IP phones in the enterprise market. One of the initial applications involves updating Centrex services to use IP telephony technology. A Centrex service is essentially a number of telephone lines that are treated as "extensions" and associated with a central switch, Centrex services have traditionally been expensive, generally costing more than an enterprise-owned PBX for companies with more than 20 extensions. IP Centrex solutions such as the iMerge(TM) Centrex Feature Gateway from AG Communication Systems, a subsidiary of Lucent Technologies, eliminates this problem by replacing the individual Centrex lines with a single IP link that can support many extensions, which of course, require IP telephones. There are about 17 million Centrex extensions in the U.S. today.

A second application for IP telephones is for hosted iPBX services. Unlike IP Centrex, which uses a circuit switch in the central office, iPBX solutions are completely IP based, replacing the circuit switch with network software that provides complete PBX functionality. These systems also require IP telephones on the customer premise. The market for telephones and traditional PBX's used by small and medium sized enterprises (SMEs) totaled $3.7 billion in 1999 (source: NATA).

"We strive to provide our customers with the most comprehensive and cost-effective IP telephony solutions possible," said Keith Barclough, president and COO of Netergy Networks. "The combination of our Audacity-T2 processor and Veracity VoIP Embedded Software enable CIDCO to bring IP telephones that are fully compliant with industry standards to market quickly and at the right price point. Our fundamental strength in delivering integrated IP telephony solutions combined with CIDCO's broad telecom development and telephony experience provide the perfect combination for a successful product line."

About Netergy

Formerly known as 8x8, Netergy Networks is a leading provider of highly integrated IP telephony solutions to telephone service providers and telecommunication equipment manufacturers. Netergy Networks' IP telephony solutions include network software and systems as well as embedded technology. The company is based in Santa Clara, California, and has offices in France and the United Kingdom. For more information, visit Netergy Networks' web site at www.netergynet.com.

About CIDCO Incorporated

CIDCO Incorporated (NASDAQ:CDCO), founded in 1988, is a worldwide leader in telephony products, services and appliances that empower consumers to communicate simply and easily over advanced telephony networks and the Internet. Through its alliances with many of the world's leading telephone companies, CIDCO develops advanced network appliances such as network feature telephones, Caller ID devices, voice mail navigation appliances and Internet appliances that enable consumers to maximize the value of telephony networks and Internet services. CIDCO introduced its first Internet appliance in 1998 for a world moving into the developing Internet appliance era and is extending this vision to devices that will make e-mail and other information services readily available to consumers that don't have access to or require traditional computers. The company is headquartered in Morgan Hill, California at the south end of Silicon Valley. For additional information, visit www.cidco.com or call [phone].

Note to Editors: MailStation and CIDCO are trademarks of CIDCO Incorporated. All other trademarks are the property of their respective owners.

In addition to the historical information contained herein, this press release may contain forward-looking statements within the meaning of the Federal securities laws and are subject to the safe harbors created thereby. The following are among the factors that could cause actual results to differ materially from the forward-looking statements: business conditions and growth in the telecommunications industry and general economies, both domestic and international; lower than expected customer orders; competitive factors; changes in product mix or distribution channels; natural disasters/acts of God; and technological difficulties and resource constraints encountered in developing and/or introducing new products. Forward-looking statements contained in this press release regarding industry trends, product development and introductions, sales, and future business activities should be considered in light of these factors and those factors discussed from time to time in CIDCO's public reports filed with the Securities and Exchange Commission, such as those discussed under "Factors that May Affect Future Results" in the company's report on form 10K for the year ended December 31, 1999, and its form 10Q for the quarter ended March 31, 2000.