Damn, that's a lot of money. I hate that Apple gave in... but I guess they kind of had to, right? At least all the hate is over with. 
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Apple Settles With Creative For $100 Million
- Thread starter chibianh
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fatfish said:
I was thinking the same thing. Creative was asking for a cease order to stop deliveries from Asia. There must be something on that super transport leaving Shanghai harbor last week.
neonart said:
Exactly. Apple is playing this to their advantage and not giving others the ability to stick it to them (license with Creative lending weight to Creative's claim) while they fought this thing.
twoodcc said:wow.....$100 million. yikes
Apple has over 9 billion in cash currently... this really is a non-issue in terms of cash outlay.
If you compare it to the risk it removes from a product that makes them billions in a year and the fact it makes it harder for others to duplicate the UI (can use Creative against them) you quickly see it really is a win for Apple.
balamw said:
True, but let's put it this way: Apple didn't settle for $100 million because winning would have cost them as much as 10% of that sum. Remember, Apple was going up against a much smaller company with far less in the way of resources. If Apple could have ground Creative down over years of protracted litigation with some assurance of getting a better deal, then I have little doubt that they probably would have done so. I suspect Apple saw a RIM-like situation, where they were unlikely to prevail in court and in the meantime the litigation environment would create opportunities for competitors.
probably not
in a corporate acquisition, there's a purchase price, and at settlement the buyer pays the purchase price plus the value of assets such as cash, so the scenario you describe, while possible, is not likely the way it would unfold. imho.
ipedro said:They still can. Apple can turn around tomorrow and buy Creative for what it's worth and would have in essence paid itself the $100M.
in a corporate acquisition, there's a purchase price, and at settlement the buyer pays the purchase price plus the value of assets such as cash, so the scenario you describe, while possible, is not likely the way it would unfold. imho.
Well, it wasn't just this lawsuit. Five lawsuits were settled @ $20M a suit + no distractions of dragging this out... Plus they now are paid up FOREVER to use this license + they could recoup some money if Licenses are granted to others... doesn't sound as drastic as $100M is suddenly down the toilet. There's some value there for Apple.jsarrasinjr said:
So Apple pays $100mil, and it sounds like Creative may be getting out of the iPod competition biz... and into the iPod accessory biz (which is probably more lucrative).
Apple appears even to be booking the license as an asset on their balance sheet and hence the cost of it will be amortized overtime (asset depreciation).JGowan said:
So, in summary...
Apple pays Creative a one time fee of $100M to licence their patents.
Creative joins the 'Made for iPod' program making accessories for their competitor, Apple, who gets money for 'Made for iPod'.
Creative still HAS to defend it's patent against other competitors - that's the nature of patents - or licence it to them. If they do, Apple takes some of that money too. In a round-a-bout way, Apple is getting money back from it's competitors. Nice.
Creative have a much better case because Apple settled.
Creative still owns a valid patent. If Apple had won, there would be no patent so anyone could copy the Creative/Apple style interface.
Apple continues on as if nothing has happened. No long court case delaying sales. No injunctions to halt imports.
Explain to me why people think Apple lost here?
Creative knew it was about to get reamed by Microsoft's Zune which it's players aren't compatible with. They knew to get out of the market. Instead of legitimising Microsoft's offering, they've tied up with Apple. It might bug us that Apple have legitimised a bogus patent but it's otherwise very, very smart.
Apple pays Creative a one time fee of $100M to licence their patents.
Creative joins the 'Made for iPod' program making accessories for their competitor, Apple, who gets money for 'Made for iPod'.
Creative still HAS to defend it's patent against other competitors - that's the nature of patents - or licence it to them. If they do, Apple takes some of that money too. In a round-a-bout way, Apple is getting money back from it's competitors. Nice.
Creative have a much better case because Apple settled.
Creative still owns a valid patent. If Apple had won, there would be no patent so anyone could copy the Creative/Apple style interface.
Apple continues on as if nothing has happened. No long court case delaying sales. No injunctions to halt imports.
Explain to me why people think Apple lost here?
Creative knew it was about to get reamed by Microsoft's Zune which it's players aren't compatible with. They knew to get out of the market. Instead of legitimising Microsoft's offering, they've tied up with Apple. It might bug us that Apple have legitimised a bogus patent but it's otherwise very, very smart.
Well, looking at the rough numbers, this settlement has Apple paying about $1.70 for every iPod ever sold.steve_hill4 said:
I would have (personally) rather seen Apple take the same stand that IBM has taken in the SCO case... but I understand Apple's position on this too.
aegisdesign said:
Yes, this is the reality. It was a wise business move, thinking long-term. Someone said it earlier, but Apple plays good chess, this is why they have over $8 billion in the bank.
The quote above should have been the last post.
nchu429 said:
Exactly! Not to mention computer sales that will also contribute to this. And now Apple has another company to add to it's list that'll be helping those iPods sales by making iPod accessories.
retroneo said:
Interesting...that's a good point.
100million to make a nagging itch go away? not bad and well worth it IMO.
If only the middle East were so diplomatic....
If only the middle East were so diplomatic....
Cameront9 said:
IMHO, this is the primary motivation for the settlement from Apple's perspective. $100M isn't really "nothing" as others have suggested (believe me, Steve fights for every $100M going into the bank, and doubly hard when it leaves again!) However, it's a fairly cheap obstruction to throw down on Zune.
Will MS license Creative's patent too? Note that the press release says that if others license then Apple gets some reimbursement.
If MS refuses to license, will that $100M fund a legal battle against them next? It will go a ways towards that battle, anyway. And, Creative vs MS is a lot more likely for Creative to win than Creative vs (MS and Apple). This settlement adds credibility to Creative's claims.
IMHO, $100M spent here will help Apple in the iPod:Zune battle at least as much as $100M spent on marketing would have. Plus, it eliminates the overhang of the legal action and potential settlement/decision down the line.
Apple could blow a hundred million in legal expenses. It's less of an instance of throwing in the towel, and more of an instance of, "You know, the way idiot judges/juries hand out settlements these days, let's just give them a paltry sum, let them think they've won, and still destroy them in the MP3 market."
Creative's market cap is only $500 million versus Apple's $57 Billion, so they probably wouldn't have had a problem doing it.IJ Reilly said: