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Apple, Creative settle legal disputes

updated 05:25 pm EDT, Wed August 23, 2006

Apple, Creative settle

Apple and Creative Technology today announced a broad settlement ending all legal disputes between the two companies. Apple will pay Creative $100 million for a paid-up license to use Creative's recently awarded patent in all Apple products. Apple can recoup a portion of its payment if Creative is successful in licensing this patent to others, however. Additionally, the Creative has joined Apple's "Made for iPod" program and will be announcing its own iPod accessory products later this year. "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."

"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."




by MacNN Staff

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Comments

  1. legacyb4

    Joined: Dec 1969

    0

    Glad that's over

    Now Apple can focus unencumbered on making the iPod better!

  1. freakboy2

    Joined: Dec 1969

    0

    yeah

    yeah because you know their engineers stopped working when the lawsuits started..

  1. TylerDurden

    Joined: Dec 1969

    0

    Note to self...

    ...(scribble-scribble) "Don't buy any iPod accessories made by Creative..."

  1. Feathers

    Joined: Dec 1969

    0

    creative lawyers

    So, were Creative's lawyers just more er...creative than Apple's. That $100,000,000 has added $0.85 earnings per share to Creative's bottom line shows how much of a small fry they are. Hope they choke on this tiny piece of Apple, given that Steve and company originally approached THEM, and they told Cupertino to sod off! There shouldn't be any second chances for shidpits like Excretive Technologies!

  1. GORDYmac

    Joined: Dec 1969

    0

    earnings, indeed!

    As others (including me) have said before...it seems that litigation is now being put in profit plans right alongside product announcements.

    Glad to see Mr. Hoo put it out there for us all to see.

  1. shmoolie

    Joined: Dec 1969

    0

    LOL

    100 million is all they got for Apple agreeing that their patent pretty much covered the iPod. Can you say "slam dunk" for Apple?

    Poor Creative. 2 years from now they will be just a blipnote in the tide of history.

  1. climacs

    Joined: Dec 1969

    0

    apple wins

    yeah I'd say Apple won that fight.

  1. pdot

    Joined: Dec 1969

    0

    Creative not closing shop

    so I guess this means that Creative won't go bust for another few years.

  1. Zkatz007

    Joined: Dec 1969

    0

    Umm...Accessories?

    Sue Apple, then make iPod accessories. Talk about biting the hand that...uh...I mean, talk about biting the hand that is going to feed you!

  1. sgirard

    Joined: Dec 1969

    0

    Cost per iPod unit sold?

    In May 2006 it was estimated that Apple had sold about 42 million iPod units. Assuming 14 million new iPods sold last quarter, lets say Apple has sold about 55 million iPods to date. That would mean that the settlement works out to about $1.82 per unit sold. That number sounds expensive on a per-unit basis unless Apple is forcasting that they will sell a LOT more iPods going forward. Interesting. Can we read anything into what might be in the iPod pipeline from this settlement?

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