Apple’s decision to settle its legal disputes with Creative Technology and even involve them in the 'Made for iPod' accessory program is the right decision according to Piper Jaffray analyst Gene Munster.

"If Creative had been able to win any favourable rulings in the five outstanding lawsuits, Apple could have faced headaches including: further appeals, product injunctions, future and historical royalty payments," the analyst wrote, reports AppleInsider.

"Considering $100 million represents 1.1 per cent of Apple's $9.2 billion in cash, we believe the settlement will prove to be the right course of action."

Allowing Creative to join the Made for iPod program is also seen by Munster as the right move and a potential milestone in the MP3 market. "Over the last several years, Creative has been focused on head-to-head competition with the iPod and it appears that the company is now embracing the iPod eco-system as a way to grow revenue," he said.

"We see this as a subtle admission by Creative that iPod does in fact dominate the MP3 player market and more may be gained from 'co-opetition' than direct competition."

Munster also said in a second research note that he continues to find Apple's share price attractive, despite the Wall Street's consensus belief that shares are currently at a premium price. "We believe many investors generally feel that Apple shares have a high relative valuation and, therefore, the Street remains split between those that believe shares deserve to continue to trade at a premium and those that believe shares should trade lower due to declining momentum."

"Our take is that Apple shares do not trade at a premium valuation." The analyst maintains an 'Outperform' rating on shares of Apple with a price target of $99.