Exhibit 10.38
                        CONFIDENTAL SEPARATION AGREEMENT
                          AND GENERAL RELEASE OF CLAIMS

          1. Ho Leung Cheung  ("Employee")  was  employed by CIDCO  Incorporated
(the "Company') on or about July 7, 1997.  Employee and the Company entered into
an Executive Employment Agreement (the "Employment Agreement") dated June, 1998.

          2. Due to business  conditions,  the Company is required to reduce its
workforce.  Such  action is  subject  to the Worker  Adjustment  and  Retraining
Notification  Act (WARN) which requires the Company to provide 60 days notice to
employees  affected  by this  action.  As a result,  the  Company has decided to
terminate  Employee's  employment  pursuant  to  the  terms  of  the  Employment
Agreement.  It is the desire of the Company and Employee that  Employee  receive
those certain  benefits that are described in the Employment  Agreement and that
he would not  otherwise  be  entitled  to receive  upon his  termination  and to
resolve  any  claims  that  Employee  has  or  may  have  against  the  Company.
Accordingly, Employee and the Company agree as set forth below.

          3. The Company and Employee agree that Employee's  employment with the
Company will  terminate on November 20, 1998 (the  "Termination  Date") the last
day of the 60 day notice period described above

          4. The Company shall provide Employee with the following benefits when
this Agreement becomes effective:

                  (a) Twelve (12) months of employee's  annual base salary as in
effect as of the date of such termination,  less applicable withholding, paid in
a lump sum.

                  (b) Company paid cost of COBRA coverage for twelve(12) months,
paid in a lump sum  together  with  payment in subsection 4(a).

Employee  acknowledges  and agrees that he has been paid all wages and  accrued,
unused vacation that he earned during his employment with the Company.  Employee
understands  and  acknowledges  that he shall not be entitled to any payments or
benefits from the Company other than those expressly set forth in this paragraph
3.

          5.   Employee  and  his   successors   release  the  Company  and  its
shareholders,  investors,  directors,  officers,  employees,  agents, attorneys,
legal successors and assigns of and from any and all claims,  actions and causes
of action, whether now known or unknown, which Employee now has, or at any other
time had,  or shall or may have  against  the  released  parties  based  upon or
arising out of any  matter,  cause,  fact,  thing,  act or  omission  whatsoever
occurring  or  existing at any time up to and  including  the date on which this
Agreement becomes effective,  including,  but not limited to, any and all claims
of breach of contract,  wrongful termination,  fraud, defamation,  infliction of
emotional  distress or national  origin,  race,  age, sex,  sexual  orientation,
disability or other  discrimination  or harassment under the Civil Rights Act of
1964,  the Age  Discrimination  In Employment  Act of 1967,  the Americans  With
Disabilities Act, the Fair Employment and Housing

Act or any  other  applicable  law.  This  Release  of Claims  shall not  impair
Employee's  right to be indemnified by the Company to the fullest extent allowed
by law or the Company's  by-laws for any claims against  Employee arising out of
any acts or omissions by Employee  during the course of his employment  with the
Company.

          6.  Employee  acknowledges  that he has read section 1542 of the Civil
Code of the State of California, which states in full:


A general  release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of  executing  the  release,  which if
known by him must have materially affected his settlement with the debtor.

Employee waives any rights that he has or may have under section 1542 and/or any
similar law of any other state to the full  extent  that he may  lawfully  waive
such rights pertaining to this general release of claims, and affirms that he is
releasing  all known and  unknown  claims  that he has or may have  against  the
parties listed above.

          7.  Employee  agrees  that he will not  apply for nor  otherwise  seek
employment with the Company at any time following the Termination Date. Employee
acknowledges  and agrees  that he shall  continue to be bound by and comply with
the terms of any  confidentiality or assignment of invention  agreements between
the Company and Employee.

          8. Employee  agrees that he shall not directly or indirectly  disclose
any of the terms of this Agreement to anyone other than his immediate  family or
counsel,  except  as such  disclosure  may be  required  for  accounting  or tax
reporting  purposes or as  otherwise  may be required by law.  Employee  further
agrees  that he will  not,  at any  time in the  future,  make any  critical  or
disparaging statements about the Company, its products or its Employees,  unless
such  statements  are made  truthfully  in response to a subpoena or other legal
process.

         9.  Employee  agrees  that  for a  period  of one  year  following  the
Termination Date:

                 (a) he will not,  on behalf of himself  or any other  person or
entity,  directly or indirectly solicit any employee of the Company to terminate
his or her employment with the Company; and

                 (b) he will not,  on behalf of himself  or any other  person or
entity,  directly or  indirectly  request or cause any customer or vendor of the
Company to cancel or terminate any business relationship with the Company.

          10. In the event of any legal  action  relating  to or arising  out of
this  Agreement,  the  prevailing  party shall be  entitled to recover  from the
losing party its reasonable and customary  attorneys' fees and costs incurred in
that action.  Provided that, for clarity,  the parties  acknowledge that neither
party will be required hereunder to advance any such fees and costs

          11.  This  Agreement  constitutes  the entire  agreement  between  the
parties  with  respect to the subject  matter  hereof and  supersedes  all prior
negotiations and agreements,  whether written or oral, with the exception of any
agreements  described  in  paragraph  6 as  well  as  the  Employment  Agreement
described in paragraph 1. This  Agreement may not be modified or amended  except
by a document signed by an authorized officer of the Company and Employee.

EMPLOYEE  UNDERSTANDS  THAT HE SHOULD  CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
THIS  AGREEMENT  AND THAT HE IS GIVING UP ANY LEGAL  CLAIMS HE HAS  AGAINST  THE
PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT.  EMPLOYEE FURTHER  UNDERSTANDS
THAT HE MAY HAVE UP TO 45 DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT
AT ANY TIME  DURING  THE 7 DAYS  AFTER HE SIGNS IT. AND THAT IT SHALL NOT BECOME
EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED.  EMPLOYEE  ACKNOWLEDGES THAT HE IS
SIGNING THIS AGREEMENT KNOWINGLY.  WILLINGLY AND VOLUNTARILY  INEXCHANGE FOR THE
BENEFITS DESCRIBED IN PARAGRAPH 3