Creative and its ZEN patent

I've been asked quite a number of times about Creative's ZEN patent, and its US$100,000,000 windfall courtesy of Apple Computer. Well, I personally think that it's a win-win situation for all that are involved.

Even though Apple paid a large amount of money, they should be happy. Now, they can avoid all the legal hassles and concentrate on their development and marketing efforts. They can release another awesomely cool and iconic iPod without the fear of “willfully infringing the ZEN patent”, potentially paying more money in the process.

Sim Wong Hoo and his management team should be happy, as this little episode gives him the ammunition to sue other companies such as Samsung, iRiver, Sandisk and even Microsoft. If Mr Steve Jobs drops all his counter suits, acknowledges the ZEN patent and pays US$100,000,000, I cannot fathom how the other “smaller” companies can fight against Creative if they get sued.

The employees in Creative should be happy, as this resolution will definitely give their flagging morale a boost. Apart from this piece of good news, it had always been “Creative's share prices are tumbling down”, “Creative still stays in the red”, “Creative losses big this quarter”, and so on. With the extra US$100,000,000 and the “Made for iPod” license, I guess it can roughly translate to more business opportunities for Creative, and better job security for the employees.

Creative shareholders should be happy. Once the settlement is announced, Creative's share prices soared. Well, it has kind of stabilized now, but I'm sure that investors are more optimistic, and will hopefully put in more money to ensure the continued growth of the company. Growth = profits = more dividends for shareholders.

See, everybody's happy!

CE