Apple got best of Cisco in iPhone deal, analysts say
MICHELLE KESSLER, USA TODAY
Apple and Cisco Systems ended their feud over the iPhone name late Wednesday - and Apple appears to have won, tech analysts said.
The two Silicon Valley tech giants said they agreed to share rights to the name and end their legal battle over it.
Cisco - the longtime owner of the name - had earlier said it would share it with Apple as long as the electronics-maker made its iPhone compatible with other companies' products. The settlement addressed that concern, with the two companies pledging to "explore opportunities for interoperability in the areas of security, and consumer and (business) communications."
Other terms were confidential.
Since the full deal was not made public, it's hard to say for sure which company came out on top, says tech analyst Roger Kay with Endpoint Technologies Associates. But it sure looks like a "face-saving" agreement for Cisco, he says.
"It looks like Cisco caved," says independent tech analyst Rob Enderle. The pledge of interoperability talks "looks like the typical promise that (Apple CEO) Steve Jobs has no intention of keeping," he says.
Cisco declined to comment beyond the official statement. Apple did not return phone calls.
The controversy over the iPhone name began last year, when Apple was developing a feature-packed cell phone. Long before it had an official name, Apple fans dubbed it the iPhone. That's because many Apple products begin with an "i," including the iPod music player and iTunes music store.
But there was a problem: Cisco, the world's largest network equipment maker, owned the iPhone trademark. It had originally been registered in 1996 by InfoGear, a networking company later acquired by Cisco. After the deal, Cisco adopted the name and introduced a line of iPhones, which it still sells today.
Cisco's iPhones are corporate office phones that place calls over an Internet connection instead of a traditional phone network. They do not compete directly with Apple's iPhone.
Lawyers from the two companies talked, but Apple broke off the discussion, Cisco said. Hours later, Apple announced its iPhone. Cisco sued in U.S. District Court.
At the time, Cisco said what it really wanted was for Apple to make the iPhone compatible with other products. Cisco advocates such standards because it sells the networking gear that connects them.
But now it appears that Apple will get the name without fully meeting Cisco's demands, Kay says.
"It looks like Cisco got shafted," he says. "Maybe there's something in the (undisclosed) terms, but I don't see how they're getting the good end of the deal."
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