Apple TKOs Cisco in iPhone bout say analysts
- 21 February, 2007 22:00
Although Apple and Cisco Systems did not comment on the details of their deal to share the "iPhone" trademark, some analysts feel Cisco got the short end of the stick.
The two companies announced they would both use the iPhone name on their products. They also will "explore opportunities for interoperability in the areas of security and consumer and enterprise communications," according to a joint statement this week.
Cisco, in a lawsuit filed in federal court last month, claimed the iPhone trademark via a 2000 acquisition of Infogear. The California company has sold a line of Linksys VoIP devicesunder the iPhone label for more than a year.
As part of the settlement, all legal action on both sides has been dismissed, but the rest of the arrangement's details remain confidential.
That didn't stop analysts familiar with Apple, Cisco and the iPhone brouhaha from speculating on who won and, more important, who lost at the negotiation table.
"The rule in Silicon Valley is that if Apple leaves the table smiling, the other guy got screwed," claims Rob Enderle, an independent analyst and principal of the Enderle Group. "And Apple left the table smiling on this one."
Roger Kay, of Endpoint Technologies Associates, agreed. "It certainly looks like Cisco gave away the store."
Both Enderle and Kay said their take was based on the clear value of the iPhone name, and the vague interoperability promises made in the statement. "I'm not convinced that Cisco got what it wanted out of this," said Enderle.
Cisco declined to comment on the record beyond the official joint statement; Apple did not return a call for comment.
Neither Enderle nor Kay was surprised that a deal was struck. "Apple couldn't afford to go to court," said Enderle. Apple had argued publicly that its cellphone-based iPhone was different enough from Cisco's VoIP iPhone to justify using the trademark. If that reasoning had won out, Apple would have opened itself up to similar justifications from rivals. "Others could have used the same argument with the iPod," Enderle said.
Technology attorney Ken Dort backed up the analysts on the no-surprise front, saying that trademark disputes are usually settled before going to court -- especially when the stakes are as high as in this case.
"I think everybody's a winner here," said Dort, an attorney with McGuire Woods in Richmond, Virginia. "Apple gets a name which really tracks into its system of [trade]marks, while Cisco gets some kind of development relationship with Apple. This does well for everybody."
Another analyst, Yankee Group's Zeus Kerravala, had a different take than either Enderle or Kay. "Who gets the short stick? Well, potentially Microsoft, since this helps Cisco be more of a consumer vendor and Apple to be more of a corporate vendor."
Kerravala, however, questioned whether Cisco and Apple can actually work together, agreement or not. "Apple and Cisco each made their mark by making things vertically integrated and where they own the ecosystem from end to end," he said. "The question is, can these two companies share the spotlight to leverage each other's strengths to come out with something better?"