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Electronics Production | August 24, 2006

Apple, Creative dispute resolved

A patent dispute between Apple and Creative has now been resolved.
Apple is now paying Creative $100 million in an out -of-court settlement over mp3 technology. Apple will now be able to use Creative's recently awarded patent in all Apple products. In addition Apple may have some of its payment returned if Creative is successful in licensing this patent to others. Creative has also joined Apple's "Made for iPod" program and later on the company will launch their own iPod accessories.

"Creative is very fortunate to have been granted this early patent," Steve Jobs, Apple's CEO, 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", he added.

"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, in a statement.

"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," he said. "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."
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