Creative Technology announced today that it has entered into an agreement with Intel to licence technology and patents, and acquire resources and assets of, ZiiLABS Inc. Ltd. ZiiLABS was formerly known as 3DLABS Limited and is based in the UK. Intel is thought to have done the deal to get its hands upon useful 3D graphics and media processing technology.
The new deal is worth $50 million to Singapore based Creative Technology Limited, most famous for its audio products. $30 million is for the engineering resources and assets of ZiiLABS in the UK. $20 million is to pay for licenses “relating to ZiiLABS' high performance GPU technology”. Creative will retain ownership of ZiiLABS Inc. Ltd and many of the technologies and patents.
Sim Wong Hoo, CEO of Creative Technology said that the deal will give Creative “increased flexibility with the ability to partner with multiple semiconductor companies on advanced design and process technologies, allowing us to mitigate risk while maintaining control over the long-term direction of our product portfolio”. The move will also bring cost savings to Creative, he said, while allowing the company to “focus on its core strength - the designing and marketing of more innovative and exciting products for our customers.”
Creative will continue to “supply and support its ZMS series of chips to its customers”. Also devices incorporating ZiiLABS ZMS-20 and the ZMS-40 media processors will continue to be made by Creative.
ZDNet notes that Creative has endured a period of 14 financial quarters in a row making losses. Slimming the company down and making the most of its patents seems like a good idea while the company searches for a more profitable direction. Intel is very interested in bolstering its mobile efforts so it looks like a good deal for both parties.
Creative does know the value of patents and famously sued Apple, stinging Steve Jobs’ company for $100 million, over the iPod copying interface elements from the Nomad and Zen players, back in 2006. After that unhappy experience Jobs is quoted to have told the Apple management team “we're going to patent it all” !