Apple Forks over $100,000,000 to Creative
The notorious patent dispute has been settled quietly behind closed doors. I am happy that Creative got some extra dough in the bank to spend on R&D and marketing, because I really do think that Creative makes some outstanding MP3 players. However, I am not happy that the American patent system is extremely flawed and has again been exploited. You can read about my opinion on the case in this post titled "Apple Copied Creative, Who Cares?" from a few months ago when the case first broke.
On a different and slightly twisted note, according to this deal, Creative will begin to sell iPod accessories later this year. Yeah, that might be a big double-yoo tee eff, but for Creative, why not? Why not tap this extremely lucrative majority market share? They have nothing to lose and everything to gain with this deal.
…and bravo to you Mr. Jobs and Mr. Sim for settling out of court. Keep up the nice clean fight.
Comments
Utew on August 24, 2006 12:28 AM
Enzo, I think there is more to this settlement than meets first glance. Jobs isn't into just giving away money for nothing. Obviously Apple gets the rights to the GUI, but... with the money and lawyers that Apple has, they most likely could of fought this patent suit and won over Creative..
I'd be willing to bet that Creative conceded something.. I just don't know what.. yet... stay tuned as there is more to come on this issue IMO.
In the meantime Creative stays afloat a bit longer.... and gets a new revenue stream.. ie iPod accessories...
EnzoTen on August 24, 2006 10:01 AM
I dont know, i think that apple got the short end of the stick here. Apple didnt really gain too much other than a new accessories partner that will pay a license fee for "made for ipod" accessories (aka the ipod tax). Creative is not the best partner for Apple because it gives Creative a chance to get thier brand name into the hands of iPod owners.
I think that Jobs new he was going to loose or it was going to cost alot or money to fight it.
Anyway.. my two cents.. for all we know they could have met up and flipped a coin. ...or a more logical explination is that they worked this deal out over too many drinks =)
what the... on August 24, 2006 12:58 PM
Well, lets not forget that Apple gets their money back... or at least some/most of it back in this deal. Everytime Creative Labs sues another company, Apple gets some of their money back. Clever way for Creative to boost their revenues for the year... and end the lawsuits. They probably know their patent is crap. It was filed in 2001. You don't think Apple could prove that they were developing the iPod before the patent was filed? please.
Utew on August 24, 2006 1:00 PM
Enzo, I like the bar reference.. a nice visual ;-)
The point has been made by a member over at epiZENter.net (voodoo3dfx), that Apple and Creative in an alliance against MS over the pending release of the Zune, could be added reason to settle this dispute. Which in my mind makes a lot of sense.
Whether MS can execute smartly on their Zune plan or not though.. remains to be seen..
Michael2k on August 24, 2006 2:06 PM
I don't think Apple lost. If this had gone to court, both parties would have "lost". Creative would continue to lose marketshare to Sandisk, and then Zune, as well as court costs, and Apple would have, even in "winning" the dispute, have burned through a lot of legal costs. The other alternative, where Creative wins, is also possible, but they STILL would have lost marketshare to Sandisk and Zune, gotten more than $100m, but have burned through a lot of legal costs in the process, while Apple would have sold more iPods and burned more legal costs and pay a fine.
This is a win-win here. Apple gets another iPod accessory manufacturer, gets the license fees for the iPod dock, gets a partner against Zune, and gets license fees for anyone found to violate the Zen patent, all for $100m. This wasn't a cost, to them, but an asset, because they licensed the patent for $100m.
Creative, on it's part, gets to sell more stuff as an iPod accessory partner (and possibly iPod compatible Zens!), gets a partner against Zune, and still has a patent with which to threaten Sandisk, Sony, iRiver, and Microsoft.