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                                                                    EXHIBIT 10.5

October 2, 2001


Mr. Ian Laing
CIDCO Communications, LLC
105 Cochrane Circle
Morgan Hill CA 95037

      Re:   Letter Agreement

Dear Ian:

Pursuant to discussions between Cidco, Incorporated ("Cidco") and CIDCO
Communications, LLC ("LLC") each party has agreed to memorialize in this letter
agreement (the "Agreement") several matters including a final adjustment of
amounts owed to each other, disposition of certain Cidco inventory, agreement to
enter into a sublease agreement for the premises occupied by LLC and settlement
of certain other matters. The Agreement is set forth below:

1.    As a final adjustment and settlement, Cidco shall pay LLC $208,763.87.
      This final amount represents the following: Receivable balance owed to
      Cidco equals $2,806,216.44 including the inventory discussed below. Cidco
      has agreed to assign and LLC has agreed to assume a Cidco debt owed to Act
      Manufacturing in the amount of $2,067,021.99. This leaves a subtotal of
      $739,194.45. Cidco now holds $947,958 of LLC's funds. Therefore, except
      for the matters set forth below, each party agrees that in full discharge
      of all its obligations to the other, Cidco shall pay LLC in immediately
      available funds $208,763.87 as of the date of this Agreement. This amount
      represents the difference between the amount due Cidco by LLC and the
      amount due LLC from Cidco.

2.    LLC agrees to pay $110,000 for all of Cidco's inventory as identified in
      Attachment A to this Agreement. This amount is reflected in and included
      in the calculations above. LLC agrees it will remove from Cidco's premises
      this inventory within 30 days after the execution of this Agreement. If
      said inventory is not removed within 30 days and after written notice to
      LLC, Cidco may take any steps it deems necessary to dispose of inventory
      not removed.

3.    Upon an offer of standard and reasonable terms from Cidco acceptable to
      the landlord and LLC, LLC agrees to enter into a sublease with Cidco and
      rent the premises located at 105 Cochrane Circle, Morgan Hill, CA 95037.
      The parties agree the sublease terms will have the result of substituting
      LLC for Cidco regarding all the benefits and commitments of the master
      lease with the landlord.


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4.    Other matters: The ShenZen factory (the "Factory") has used $144,167 of
      Cidco owned raw materials in building equipment for LLC and Cidco. Cidco
      hereby assigns to LLC the right to collect this money owed by the Factory.
      LLC agrees to pay Cidco as this debt is collected. LLC enjoys a Cidco
      credit for the use of Nortel technology in certain LLC products. The
      remaining credit is $35,425.75. LLC agrees to reimburse Cidco as LLC uses
      the credit. The payments above are due immediately upon use or receipt of
      payments. Effective 10/01/01, LLC agrees to reimburse its portion of
      Cidco's monthly PBX maintenance fee in proportion to LLC's usage as
      defined by Lucent's 10/02/01 independent audit.

5.    This Agreement is binding upon and shall inure to the benefit of the
      parties, their successors and assigns.

6.    This Agreement may be executed in one or more counterparts each of which
      shall be deemed an original.

If the above Agreement is acceptable, please have an authorized signatory of
CIDCO Communications, LLC sign below and return one original to me. Please
contact me with any questions at the address below.

Sincerely,


/s/ Paul Locklin
Paul Locklin
President & CEO


                                          Accepted and agreed
                                          as of   10/17/01
                                                ________________________________

                                          CIDCO Communications, LLC

                                          By:  /s/ Ian Laing
                                             ___________________________________

                                          Name: Ian Laing

                                          Title: CEO
                                                ________________________________