Wednesday, August 23, 2006

Apple pays Creative USD$100million in settlement

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In a twist of events, Apple and Creative has finally decided to settle their differences out of court with Apple agreeing to pay Creative USD$100 million to use its ZEN patented interface. Apple has also dropped its 5 other lawsuits against Creative which accuses it of infringing its own patents.

"Creative is very fortunate to have been granted this early patent," said Steve Jobs, Apple's CEO. "This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation."

In addition, Apple also grant Creative the license to produce accessory products for the iPod. Creative will be announcing its line of products (which I heard includes an iPod Traveldock) later this year.

"We're very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative," said Sim Wong Hoo, chairman and CEO of Creative. "Apple has built a huge ecosystem for its iPod and with our upcoming participation in the 'Made for iPod' program we are very excited about this new market opportunity for our speaker systems, our just-introduced line of earphones and headphones, and our future family of X- Fi audio enhancement products. We expect that the one-time licensing payment of $100 million will contribute approximately $.85 of earnings per share to our current quarter, ending September 30, 2006."

This is great because business lawsuits - as Ms Peter would tell you - are extremely expensive and could drag on for years. So now not only would Creative save on the millions that they would have to fork out for the lawsuit, they are getting an additional USD$100 million (something they really need before they bleed to death). Although it seems a tad bit weird that now Creative will be producing iPod accessories ...

Anyways, appearing on headlines for a good reason = good publicity
CNN: Apple to pay $100M to Creative in settlement
BBC: Apple in $100m patent settlement
CNBC: Apple to pay $100 mln to Creative in settlement
Reuters: Apple to pay $100 milion to Creative in settlement
Bloomberg: Creative Shares Surge on $100 Million Apple Payment
CNA: Apple Computer to pay Creative US$100m to settle patent dispute
Engadget: Apple and Creative settle, Apple forks out $100m

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