updated 09:05 pm EDT, Wed June 7, 2006
Apple turned to Creative?
Although Apple CEO Steve Jobs' marketing genius may have popularlized the iPod, Creative was the leader in the MP3 player market, garnering the attention of Apple before its launched own iPod. Locked in an ongoing legal battle, the two companies are facing a long road ahead, and have not only turned to the courts, but also the U.S. International Trade Commission. After a breakdown in talks, Creative fired first with a lawsuit alleging violation of the "Zen Patent," while Apple coutersued and then filed an additional copyright lawsuit last week in U.S. District Court for the Eastern District of Texas.. A new Wall Street Journal report claims that the Cupertino-based company turned first to Creative [subscription required] before releasing its own iPod.
According to the report, the lawsuit says that in early 2001, Apple was hoping to either license Creative's technology or jointly invest in a new company that would further develop Creative's MP3 player products.
A protracted legal battle could hurt the chances of the Singapore-based Creative Technology as Apple could try to outspend Creative, according to analysts. Analysts told the publication that, if true, the inability to strike a deal with Apple in 2001 cost the company dearly. Through the end of April, Apple had a 77 percent share of the U.S. portable-MP3-player market, according to the report: the remaining four competitors, including Creative, have less than 10 percent each, according to market-research group NPD.
According to documents obtained by the WSJ, the lawsuit claims that Jobs "approached a Creative employee at the January 2001 MacWorld trade show and praised the Nomad MP3 player. The two discussed a possible meeting, and Mr. Jobs 'indicated Apple wanted a smaller version' of the Nomad, according to Creative's filings. The next month, according to the suit, Creative executives met again with Mr. Jobs. The suit says Apple offered its two proposals at this time, but Creative declined both overtures." In October of the same year, Apple introduced its first iPod.