Letter To Shareholders - Mitac

and cell phones, vehicle screen displays are starting to become the fourth most
common display device for the average person.
C. Outdoor navigation
GPS is being more widely used than ever in our daily life. For example, during
cycling, hiking, camping among other diverse activities. Humans’ need for
navigation is not confined to vehicles, but also during outdoor activities; for this
reason, outdoor GPS navigation devices are also becoming the market's new
favorite.
(4) Competition
A. Merging
Many PND and cell phone manufacturers merged graphics vendors or other
suppliers to lower costs on software and hardware in 2008, such as Navigator
TomTom who bought Dutch TeleAtlas (TA); Nokia merged graphics company
Navteq. As for MiTAC, we purchased Navman and will continue to cooperate with
good graphics companies and will divide markets by providing added-values.
MiTAC also acquired Magellan, America's third largest navigation provider, while
CSR acquired SiRF, the world's largest GPS chip supplier, in 2009.
B. Competition among vendors
Having so many manufacturers joining in the research, development, and
production of handheld devices, product variety and competitiveness within the
market is becoming more intensive than ever. In 2009, MiTAC will continue to
focus its designs based on consumers' needs; enhancing the convenience and ease
of operational interfaces while extending the comprehensiveness of its map data
as well as product differentiation.
The rapidly growing sales volumes of smart phones also present enormous
opportunities, for which MiTAC already has extensive involvement in this
segment. Its 2009, focus will be placed on the development of smart
phone-compatible navigation software that produce higher profit margins.
MiTAC continues to outstretch its competitive edge through innovative research
and development, production quality and cost control, and mobile positioning
services; its product developments are especially aimed to create market trends,
customers' satisfaction and needs. Through strategic alliances with world
renowned hardware and software providers of mobile communication services,
MiTAC aggressively searches for new buyers in the global PND market, capturing
the third largest market share at 7%. Its acquisition of Magellan, the world's fourth
largest GPS brand, will help raise its market share in the north American region
and capture the outdoor GPS market, thereby providing significant support to the
company's future revenue growth.
4. Enterprise and channel server products/ workstation
(1) Product Status
The company’s sServer products can be classified into X86 and non-X86 categories.
Non-X86 servers are targeted at mainframes customized for specialized uses or
professional users. CISC, RISC, EPICRISC, and Itanium UNIX series have
relatively fewer users and the market is lead by Sun, IBM, and HP among other
world renowned manufacturers. On the contrary, X86 servers are developed and
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