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2/22/2007
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Apple-Cisco iPhone Deal Positions Firms To Jointly Pursue Wi-Fi And VoIP

Scheduled for delivery in June, Apple's iPhone will have Wi-Fi capability -- a mobile phone feature that is likely to roil the entire cell phone landscape.

Now that Apple and Cisco Systems have forged an agreement to resolved their dispute over the iPhone trademark, the companies are now in a position to team up on Wi-Fi and VoIP. Apple and Cisco announced late Wednesday that they have reached agreement over the rights to use the name iPhone.

Scheduled for delivery in June, Apple's iPhone will have Wi-Fi capability -- a mobile phone feature that is likely to roil the entire cell phone landscape. Cisco's iPhone family, marketed through its Linksys unit, already has Wi-Fi capability as well as VoIP features.

In the terse announcement reporting the conclusion of their dispute over the iPhone trademark, the firms stated: "Cisco and Apple will explore opportunities for interoperability in the areas of security and consumer and enterprise communications. Other terms of the agreement are confidential."

Apple plans to sell its iPhone through an exclusive marketing agreement with AT&T's Cingular Wireless unit. While Cingular's data network is woefully slow, the Wi-Fi feature will give the mobile phone high speed data capability when users can find Wi-Fi hotspots. To date, cell phone service providers have been reluctant to introduce mobile phones with Wi-Fi capability, fearing the wireless technology -- which is often free -- could cannibalize their existing data network service offerings.

Apple and Cisco had been negotiating for months over the iPhone trademark prior to Apple's formal introduction of its device on Jan. 9. Cisco promptly sued Apple on Jan. 10 over the trademark. The two sides squared off with Apple calling the Cisco suit "silly" and Cisco continuing to pursue the lawsuit. In accordance with the agreement, all litigation over the trademark has been dropped.

The two firms are now all sweetness and light in the wake of the agreement, which stipulates that both companies can use the iPhone trademark on their respective products worldwide.

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