“Investors cheered Creative Technology’s 100 million US dollar settlement from rival Apple Computer on Thursday but analysts warned the Singapore company’s troubles are from over,” AFP reports.
“Analysts said the loss-making Singapore company faces an uphill battle to get its business back on track after investing heavily in the last two years to challenge Apple’s dominance in the MP3 music player market,” AFP reports. “‘Their cost structure is still too high, they are still losing money,’ said Claudio Checchia, a regional research manager with International Data Corp. They still have to go a long way to improving their own cost structure and to get sales high.'”
AFP reports, “Jonathan Ng, a technology analyst with CIMB brokerage, said the settlement has cleared the uncertainty of a possible long legal battle. ‘However, the settlement does not change our negative view on its core businesses. Demand for its audio products have been waning, and competition for the MP3 player market has intensified. We still cannot find any new ‘killer’ products from Creative that could help revive strong earnings recovery in the near term.'”
“Under the deal Apple will 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.,” AFP reports. “Creative would also begin marketing its own line of iPod accessories as part of Apple’s ‘Made for iPod’ programme. ‘It is definitely going to bolster the fact that Creative does have superior technology… It shows that it is a technology company, just that Apple has more superior marketing,’ said DBS Vickers analyst Don See said, that the Singapore firm was strong in headphones and speaker systems design.”
Full article here.
Yeah, the reason Creative failed where Apple succeeded wildly is because Creative has “superior technology,” but Apple has “more superior marketing.” Keep telling yourself that, Mr. See, you delusional twit. Maybe someday you’ll come to believe it, even if no other sane person on earth does.
Analyst: Apple’s relatively small settlement with Creative removes threat hanging over iPod – August 23, 2006
Apple & Creative settle: Apple pays $100M for ‘Zen’ patent, Creative plans iPod accessories – August 23, 2006