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This is why they pay Steve the big $1.

Apples settlement also adds credibility to Creatives patent so they'll be able to charge more for future licensee's.

ZUNE will buy lunch at Creative.

Smart accounting by Apple, and you know Creative will go after Microsoft ASAP.

A win-win. Apple may dump $100 million but they will make that back and more on the Creative deal.

zune, scandisk... creative should go after them all.

Man, I'd hate to play chess with Jobs! What a "creative" solution. As usual Apple's nimble moves enables this deal to have far reaching effects for the entire industry, far beyond just settling a lawsuit between A and C. Checkmate!

Unlike M$ which is hell bent on snatching defeat from the jaws of victory.

I do the job. I get paid.

Go run your little world.

Apple should have bought Creative for the marginal audio technology and ownership of the patent. MS might decide to go that route and that might put Apple at a disadvantage.

nice one, Apple -
now you got a quick angered pit-bull at your side who barks and bites the competition in the form of lawsuits on a daily basis. ^_^

Apple probably had to pay a second $100 million to the attorneys.

Before the announcement a 51% stake in CREAF would have been about $250 million, or 150 more than Apple paid. I wonder why they didn't buy it. Fear that the stock would jump far too much on announcement of the purchase? Fear that anti-trust issues would prevent it? Killing your number two competitor while gaining a decent amount of intellectual property for about 3% of your cash on hand seems like it would have been a pretty good deal.

I hate that Apple gave into these clowns, but at the very least Apple should have just bought the patent outright.

macromancer,

Apple don't need to buy the patent.

If Creative lisences it to anyone else they pay Apple.

If the patent gets challenged and overturned then Apple can sue for their money back.

If Apple had bought Creative and the patent gets challenged and overturned then Apple would have paid or nothing.

Meanwhile as things stand Apple has Creative to do all their dirty work for them and harrass all the competition while they focus on their core businesses.

Win-win for Apple.

"I hate that Apple gave into these clowns, but at the very least Apple should have just bought the patent outright."

They didn't have to. Don't forget that Apple has several patents of their own protecting iPod features. Just because another competitor may have to pay Creative for a license, they may also have to work around Apple's patents as well.

So Apple spends 1.1% of it's cash horde to Creative. In return they probably get Creative to harass Microsoft. I'd bet Creative is a bit miffed at Microsoft for the dumping of Plays For Sure and going with Zune. In addition Apple probably gets some revenue back through the Made for iPod program with Creative though I doubt Creative is paying the normal 10% rate. Finally, Apple gets some of that 100 million back if Creative can successfully sue Microsoft or some other MP3 manufacturer. I think there is little doubt that Apple won this round.

Should read:

"If Apple had bought the Patent (not Creative). . .

I think Apple is choosy about what companies it acquires. You can acquire someone because they have something you want, or you can acquire someone in order to shut them down. Apple historically has only selectively done the former, while Microsoft does the latter without a second thought (they do a lot of the former too, as Microsoft is a company built mainly on acquisitions, starting with MS-DOS).

Besides, acquiring Creative would have been a huge drain on Apple. Apple would end up with a huge amount of inventory that they would have to immediately write off on top of the acquisition price. Investors generally don't like inventory write-downs.

Secondly, Creative employs a lot of people and owns a lot of capital assets. Apple would have to figure out what to do with those. They just can't fire everyone because as the acquirer, they would still have legal, technical, and financial obligations to Creatives customers. All the warranties for Zen players would then be Apple's burden.

It was much simpler to simply license the patent, even if it was bogus. That way, Apple no longer has to spend the time and resources enforcing that patent, letting Creative go after all the other players on its own dime.

This is corporate chess at its best.

All these jaundiced macdailynews.com readers do not understand the scope of corporate acquisition. Idiots. Stick to doing what you know, which is putting your lips on Jobsies' rump. Leave the corporate chest play to the real movers and shakers.

LOL!

Or Microsoft could buy Creative and call it a day. Costs less to buy Creative than all those towels in Redmond.

/\/\/\

"corporate chest play"????? I thought that would bring a civil rights suit in a nanosecond?!?!?!?!?

MW: :she, as in, "She, she screams in silence..." (Green Day)

I'm a genius...