Politics: iPod vs Nano Players - Creative made Apple U-Turn

Atobe SG

The ANTI - 'No U-Turn' Guru - Mr Sim Wong Hoo has taken on a giant, and despite all odds, he stuck to his own principles, and challenged Apple Computer for technology infringement, and won a handsome prize, and vindicating his position in the Business World.

From ChannelNewsAsia - 24 August 2006

Apple Computer to pay Creative US$100m to settle patent dispute

Posted: 24 August 2006 0705 hrs

SAN FRANCISCO : Apple Computer announced on Wednesday it would pay Singapore-listed Creative Technology US$100 million to settle a dispute over patented technology used in iPod and Nano MP3 players.

The deal ended a budding legal battle that began earlier this month after Creative was awarded what it referred to as a "Zen patent" on technology used to select and sort songs in its Zen MP3 player.

Creative went to US court, and the US International Trade Commission, to accuse Apple of infringing on its patent by using the technology in iPod and Nano players.

"Creative is very fortunate to have been granted this early patent," Apple chief executive Steve Jobs said in a statement.

"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."

Apple would pay Creative 100 million dollars for a license to use the technology and would be able to recover some of the money if Creative licensed the patent to others, according to the companies.

Under the terms of the settlement, Creative, an Apple rival in the MP3 player market, would also begin marketing its own line of iPod accessories as part of Apple's "Made for iPod" program.

"We're very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative," said Creative chairman and CEO Sim Wong Hoo.

"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."

Creative expected the licensing windfall to boost its current fiscal quarter earnings by 85 cents per share. - AFP/ch

BillyBong SG

The 100 mil compensation package accepted by Sim will go a long way to demolishing people's misconception that Creative sued Apple to get a piece of the pie.

Apple would only pay up if they did indeed infringe certain Creative patents, a suggestion confirmed by Steve Jobs. Thus it would seem that the counter suits by Apple were merely a distraction to throw the public off course. Cool

redstone SG

hmmm

oxford mushroom SG

Well done! It’s not just the money…Creative shares are up and they will get to make accessories for iPOD. Very good news indeed!

Ito_^ SG

o,O

Atobe SG

Typical aggressive corporate strategy - aggressive counter-attack when attacked.

Simple attempt to scare the small fry, shake his confidence or that of his shareholders with a counter-suit that can bust Creative - so as to push them to drop their initiative in starting the legal claims.

Had Sim been forced by his shareholders to drop the legal claims after initiating it, Apple Computers will have bitten a fatal chunk from Creative.

It was calm leadership from Sim, in having great nerves in holding his ship steady - as a result of knowing his grounds, his ability to gather continuous confidence and trust of his shareholders to back him to the hilt in the confrontation with Apple.

With an amicable ending, it will be good business for both parties - and better offerings for the consumers.

It was a case of "Right vs Might" - for once it had a happy ending.

countdracula SG

the moral of the story is this, when you’ve created something, don’t be a show-off, patent it. in this case, apple supposedly was ahead of the technology but creative patent it first….

Diesel_Dimension SG

so a $100,000,000 to pull creative out of the red?

^tamago^ SG

finally they have some good business sense.

now, where's their killer product. Laughing

missqi SG

yeah yeah.
But you can't deny one thing.
Their products really suck.

av98m SG

Creative's winning the case doesn't change the fact their products suck and most people will still buy ipods. Creative now making ipod accessories shows that they know that too. Laughing

Atobe SG

Was Creative ever in the 'RED' ?

Was it not the foresight of Creative in making music available in such a compact player with its initial 'Zen' series ?

It was the 'technology' used in Creative portable players that was copied into the iPod.

In any case, nothing stay static, despite the fact that Creative was not quick enough to come up with newer ideas and improved models.

As matters stand, SanDisk is the latest entrant into this portable sound device, and has slashed prices by more then half.

Apple is already rumored to be preparing a NEWER iPod in response to SanDisk challenge; and despite paying $100 Million to Creative, it has to contend with 1.8 million laptop battery pack for replacement; and R & D investments in the continuous race into the future.

Staying in this competitive and volatile MP3 business require a huge budget, and also talented team of specialists.

If you cannot compete, the next best thing is to manufacture the peripherals to latch on to someone else's winning product.

This conserves one's resources, and not waste it but use it to make more money with whatever amount in one's treasury.

The ANTI No U-Turn guru at Creative will know when to make another U-Turn to ride the next wave of opportunities.

nanren4ever SG

Yeah, Creative may have won the Moral battle, but in the end, Apple is still going 2 rank in the money, simply because they had done a fantastic job on their Ipod. Look at the different MP3s in the market nowadays, and u see how they are all seemingly basing the product appearance on tat similar to the Ipod

ShutterBug SG

Well, yes - Hip Hip Hurray CREATIVE!

But I'm also thinking; Live by the Sword, Die by It...

asdfzhao SG

Originally posted by nanren4ever:
Yeah, Creative may have won the Moral battle, but in the end, Apple is still going 2 rank in the money, simply because they had done a fantastic job on their Ipod. Look at the different MP3s in the market nowadays, and u see how they are all seemingly basing the product appearance on tat similar to the Ipod

wow, an insult to the mp3 designers out there, saying they got no originality... Rolling Eyes anyway, go take a look at mp3 players by big companies (besides creative), they bear no resemblences to the i pod.

Atobe SG

This statement is also applicable in politics - which explains for the P.O.O. constantly running scared, constantly instilling Fear about the Unknown and Unpredictable Future, and giving themselves the reason to have a grip on the monopoly to Power.

Atobe SG

Was it the iPod Shuffle or Nano that was reported to have a fantastic problem with its screen cracking easily ?

Apple Computers made its money from computers, and had made a late entry into this market of portable device to play MP3 music, which was initially identified by Guru Sim of Creative Technologies

Creative Technologies was slow in detecting the preference of consumers to have a wider variety of ADD-On options that are available from Third Parties, and which can help boost consumer interests to its original product.

Apple Computers did not have any such qualms in allowing Third Party products to be used with its iPod units, and this help boost its iPod popularity and achieved stellar sales results.

Apple iPods offered a wide variety of colored cover options and accessories, which Creative Zen did not and disappointingly came in fixed colors.

Hopefully, Creative will learn from this tragic mistake and be more open to any similar hardware products in the future, and allow Add-On products from other parties - as such hardware products are unlike his Creative Sound Cards.