Apple, Cisco to share iPhone name

APPLE chief executive Steve Jobs can start selling the iPhone in the US in June as planned after agreeing to share the name with Cisco Systems and averting a court case.

The companies ended a six-week dispute by agreeing to share the iPhone brand and explore ways their products can work together, according to a joint statement late yesterday. Cisco sued Apple last month for violating a trademark owned since 2000.

The settlement paves the way for Cupertino, California-based Apple to start marketing the combination music player, mobile phone and messaging device, introduced to fanfare last month in San Francisco. Jobs expects to sell 10 million iPhones next year for as much as $599 (€456) apiece, taking on Research In Motion Ltd’s BlackBerry and Palm’s Treo.

“This removes a distraction,” said Bill Fearnley Jr., an analyst with FTN Midwest Securities in Boston. He rates Apple shares “buy” and doesn’t own any. “The iPhone is an exciting product that will help Apple extend the brand.”

Cisco, the world’s largest maker of computer-networking equipment, claimed Apple’s iPhone violated a trademark that Cisco acquired with the purchase of Infogear Technology Corp. Apple, which unveiled the device on January 9, called the suit “silly” because its iPhone differs from Cisco’s Web-based home phone.

“IPhone is worth a hell of a lot more to Apple than to Cisco,” John Daniel, a partner at Kramer Levin Naftalis & Frankel in New York, said before the announcement. He isn’t involved in this case.

“I don’t think anybody associates iPhone with Cisco these days,” he said.

Apple approached Cisco about using the name several times in the past year and announced the product before an agreement was reached, according to a January 10 blog posting by Cisco general counsel Mark Chandler.

Cisco’s iPhone is part of its Linksys home routing unit, which the company purchased in 2003 to tap the consumer market.

The phones, which sell for less than $100, enable Web-based calls through eBay’s Skype service and Yahoo’s Messenger.

The companies said yesterday that they will explore ways they can work together in security products as well as consumer and business communications.