Clash of titans averted: Settlement allows Apple to use iPhone

Both Apple Inc. and Cisco Systems Inc. will use the “iPhone” name worldwide, Cisco’s lawsuit against Apple has been called off and the two companies will “explore opportunities for interoperability” between their products, according to a joint statement issued by the two companies.
An extended deadline for resolution of the dispute expired yesterday.
The companies also “acknowledge the trademark ownership rights that have been granted,” a cryptic statement that might reflect recognition that Cisco is indeed entitled to the trademark rights to the name that it claimed.
As is frequently the case with largely confidential settlements, the public statement was terse and other terms-including a possible payment by Apple to Cisco to use the name-remain confidential and were undisclosed.
The dispute erupted when Apple announced its iPhone in January, despite being unable to reach agreement with Cisco, which had trademarked the name and sells a line of converged devices for voice and data over IP that bear the name. Cisco filed suit, charging trademark infringement, the day after Apple’s announcement.
Apple may have been banking on the fact that its iPhone product-a touch-screen cellphone with browser and multimedia-is unlikely to be confused with Cisco’s VoIP product. Yet Cisco may hope that opportunities for interoperability between the two companies’ products-security, consumer and enterprise communications were mentioned in the settlement announcement-might lift its boat, if Apple’s iPhone sees market success.
Meanwhile, in a Compete Inc. online survey of consumers who researched Apple’s iconic iPod devices in December, consumers appear willing to change carriers to get the iPhone, now scheduled for launch in June at Cingular Wireless L.L.C. Compete concluded that, “properly priced,” the iPhone has the potential to “seriously disrupt” the United States handset market. The caveat is significant. The iPhone’s announced price of $500 or $600, based on memory capacity, is at the high end of a highly subsidized, U.S. mobile device market.