July 11, 2002

Dear AltiGen partners,
We've just announced our third consecutive revenue growth on the 17th. We are obviously happy with the result, but even more gratifying is the knowledge that our product is having positive impact on our partners' businesses.  I'd like to quote from an e-mail from one of our partners in Texas:

"Our business has turned around as a result of our commitment to AltiGen.  Two years ago, we were losing money in an increasingly commoditized business and had no clear path for changing the situation.  Now, we're profitable and growing and have been infused with new hope and enthusiasm."

It is very gratifying for a company to know that the product it works so hard to design and perfect is making a difference. Looking ahead, we assure you that AltiGen will continue to innovate. We'll continue to increase both the depth and the width of our product offerings, which allow you to offer products that not only help your customers, but that also allow you to prosper as a business.

Additionally, we are steadfast in our commitment to be a blessing to society. As we have always been saying, we do not know whether we will be a prominent company, but we are determined to be a significant company in how we conduct ourselves.

With accounting scandals popping up almost everyday, the exchange rate of the dollar, etc., we feel concerned about our country's financial health, but we also understand that what each of us can do now is to stay the course, and continue to execute and contribute to the vitality of the economy.

The past two years have proven to be a tough test for many companies, and I am sure the simple fact that you're reading this e-mail means you are a survivor. You have passed the test of the past two years and are still standing.

Reflecting on the past, the most important things I learned about business were through tough times, not theories from business school. I believe that suffering and tough times actually remove a great deal of a person's shallowness; the same is true for companies.

The strain of life is what builds our strength. If there is no strain, there will be no strength. In the past two years at AltiGen, we could have just endured during bad times, but I truly believe we did not just endure, we persevered . We took the bad times as an opportunity to re-configure ourselves for enhanced competitiveness and efficiency.  We refined and automated our business processes, we found ways to increase the depth and the width of our offerings - and it's paying off.

I believe some of you may have been adversely affected by the current economic condition, but I encourage you to look at it as an opportunity - an opportunity to be a better entrepreneur, an opportunity to build a better company. 

We do business the old fashioned way - by offering a great product, by treating our partners with integrity and sincerity, and by sticking to our principles. We are confident that our stock price will reflect its true value at the right time, and we at AltiGen look forward to working together with you to create a company that will not only help you build a prosperous business, but also make you feel proud to be associated with.

One can graduate from the most prestigious business school in the world, but whether a person can be successful as an entrepreneur depends on two essential characters: vision and perseverance.

Vision is the ability to see things not yet obvious, and perseverance is the faith in that vision and the determination to keep going. We are in an industry that pushes for the progress in telecomm - progress from the old-fashioned closed PBX to an open system approach that embraces new IP technology. We know this is the logical evolution, and yet we also know that for an industry to go from its infancy to maturity, it always takes time, which makes perseverance essential. With perseverance, we can turn hardship into a prelude to victory. In the end, it's the ones with the vision and perseverance that win!

Dear partners, when we have a vision, our reach exceeds our grasp. We at AltiGen are committed to persistent pursuit of improvement, and our goal is to be a different kind of company. We will never stop running the race. We are committed to our partners and we will never stop finding ways to serve you better. We look forward to a great future that we will build together - with vision, and with perseverance.

Gilbert Hu