Cisco Systems Inc and Apple Inc announced that they have settled the trademark-infringement lawsuit that threatened to derail Apple's use of the "iPhone" name for its much-hyped new iPod-cellular phone gadget.
The companies said on Wednesday that Apple has been given the permission to use the name for its sleek new multimedia device in exchange for exploring wide-ranging "interoperability" between the companies' products in the areas of security, consumer and business communications.
No other details of the agreement were released and representatives from both companies declined to comment beyond their short joint statement.
The companies said they would dismiss any pending legal actions regarding the trademark.
The showdown between the Silicon Valley tech heavyweights erupted last month when Cisco sued Apple in San Francisco federal court claiming that Apple's use of the iPhone name constituted a "willful and malicious" violation of a trademark that Cisco has owned since 2000.
Cisco's Linksys division has been using the trademark since last spring on a line of phones that make free long-distance calls over the Internet using a technology called Voice over Internet Protocol, or VoIP.
The lawsuit was filed a day after Apple chief executive Steve Jobs unveiled his own company's iPhone, a multimedia device that operates over the cellular network instead of the Internet on Jan. 9 in San Francisco.
Neither company would discuss what future products might come from the collaboration.
But analysts said the deal could help both companies strengthen their positions in the increasingly fierce battle to deliver video and other applications through the network directly to consumers' homes.
Zeus Kerravala, a network infrastructure analyst with Yankee Group, said there are ample opportunities for the companies to dream up collaborative projects to win over consumers.
One possibility, he said, could be the creation of a Linksys device that users call into to record podcasts that are then automatically uploaded to iTunes, which would make the creation and dissemination of such programs easier.
However, he cautioned that both companies need to be willing to share in order to make the partnership work.
"If the two actually can work together, then the combination of the two is obviously more powerful than the two butting heads," he said.
"There's no company out there that understands network service like Cisco. And you could argue no other company understands user experience like Apple," he added.
The dispute highlights the shifting business strategies for both companies.
Cisco, Silicon Valley's most richly valued company with a market capitalization of US$166 billion, makes most of its money by selling the routers and switches that direct data traffic over computer networks.
The San Jose, California-based company, however, is also making an aggressive push into the consumer market and toward products that help deliver content.
Cable set-top boxes, wireless broadband routers for the home and equipment for playing digital music are some of the products it has been considering.
Cupertino, California-based Apple is also expanding its business range from beyond primarily a Macintosh computer and software maker as it capitalizes on the demand for digital music and the soaring popularity of its iTunes and iPod products.
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