For a while now, the MP3 player market has been dominated by Apple with their iPod and they’ve had Creative nipping at their heels with their range of copycat players. Creative, unhappy with being trounced at the MP3 market, launched a series of patent disputes against Apple based on the iPod user interface which they claimed to have invented.
Lending credence to this, Apple just settled for $100 million dollars. A drop in the ocean for Apple to be sure (with their on-hand cash now exceeding $6 Billion). And in addition to this, Creative has now become a member of the “Made for iPod” program. It means they’ll be producing their speaker systems, their just-introduced line of earphones and headphones, and their future family of X- Fi audio enhancement products – MADE FOR IPOD….
So…they turned the number one competitor in that space into their staunchest ally. Creative made a packet out of this (which kinda shows they’re a bit a David among the Goliaths) and I wouldn’t be surprised if they’re going to start winding down their MP3 player sales.
Why?
One word. Zune.
Microsoft’s previous attempt to FUD the heck out of the digital music market has now been shown to be a bit of a disaster. As a result, the Great Beast has now decided that the slim pickings from licensing their codecs isn’t enough and they have now decided to devour the ecosystem they created for Creative and other MP3 player manufacturers. (As an aside, the Zune will allegedly have VoIP capabilities which is what I thought the original iPod would have been…)
So, isn’t that just perfect. Turn your greatest foe into an ally, get them to call of their lawyers with a payment that will give them a happy Christmas while reducing wastage and bar PR and flipping the bird to your biggest potential future customer. Sweet.