MP3 music player maker Creative's US patent lawsuit against Apple has boosted the loss-making Singapore firm's shares, but analysts fear it will disrupt management turnaround efforts.
Creative Technology Ltd, the world's number-two MP3 player maker, whose Nomad and Zen players compete with Apple Computer Inc's market-leading iPod, filed patent complaints against Apple in federal court and with a US trade agency on Monday.
The company is seeking an injunction and increased damages for alleged violation of its "Zen" patent. It is also seeking an exclusion order and a cease-and-desist order against Apple that would prohibit the US firm from selling, marketing or importing its popular iPod portable music players into the US
Kim Eng Securities analyst Gregory Yap said Apple was unlikely to give up its lucrative iPod business without a long, expensive fight - time and money that loss-making Creative cannot afford to waste.
"Creative's suit against Apple may bring relief to the share price in the short term, but in the long term, it will distract and divert management attention and company resources when both are needed to turn around the ailing business," he said.
Creative also competes with South Korea's Samsung Electronics, which produces the Yepp players, Japan's Sony Corp, and South Korea's Reigncom Ltd, whose iRiver players have won good reviews.
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