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Apple Feeds Creative's Bottom Line

Wednesday, January 31st, 2007 at 8:20 AM - by

iPod competitor Creative Technology put US$92.2 million into the bank for its second quarter thanks to a $100 million licensing payment it received from Apple Inc. The one-time payment was part of a settlement over a patent dispute involving technology used in iPod media players.

Creative reported $425 million in revenue for the quarter, up from $391 million for the same quarter last year, according to Digit. The $100 million payment from Apple translated into $82 million in net income, boosting Creative's net income up from the $9.9 million it earned without the settlement.

The patent dispute stemmed from Creative's claim that Apple was using MP3 player interface technology in the iPod without permission. As part of the licensing deal, Apple can recoup some of the money it paid should Creative license its interface patents to other companies.

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burrito said:

member since 07 Aug 2005 with 177 posts, unranked, send him a message or view his profile

Wed Jan 31, 2007 1:01 pm

i can't help but feel a little bad for creative, and i think thats why apple went easy on them. historically, they've been a rather important company for consumer pee-cee audio, and lately, microsoft has been screwing them hardcore, both with the release of the zune (playsforsure, anyone?), and by discontinuing support for hardware audio rendering in windows vista. those two actions have pretty much depricated creative's product line, so i think apple was more interested in forming an ally than squashing the little guy, in this case. if you remember, when news of this settlement first broke, both parties made statements about a desire to work together in the future, and creative joined the "made for ipod" program.

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A guest said: (hide)

Wed Jan 31, 2007 6:19 pm

Personally, if I were to use a non-Apple MP3 player, it would have been one made by Creative.

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A guest said: (hide)

Thu Feb 01, 2007 1:40 am

I lost respect for Creative when they bought out Aureal and shelved the Vortex spatial sound technology in order to continue shipping their "EAX" (enhanced reverb) technology.

Perhaps Apple and Creative can reintroduce the true 3D audio processing into a new line of Macintosh computers? Who knows.

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