Analyst estimates Apple paid Cisco between $25-50 million for ‘iPhone’ name

With the iPhone trademark settlement behind them, Apple and Cisco “could partner in the near-term on lower-profile projects that leverage the respective strengths of the world’s largest networking equipment company and the new darling of digital entertainment,” Jordan Robertson reports for The Associated Press.

“Some of those efforts, they said, could include integrating Cisco’s Voice over Internet Protocol, or VoIP, technology into Apple’s iPhones, which are currently designed to operate only over the cellular network; improving the ability of Apple computers to work securely with wireless home routers from Cisco’s Linksys division; or generally developing ways for both companies’ products to work seamlessly with each other,” Robertson reports.

Robertson reports, “Analysts cautioned against expecting any type of major concessions from Apple concerning its proprietary technology, citing the vague joint settlement statement from the companies that raised more questions than it answered. ‘As far as concessions go, from Apple’s point of view, is there a downside to making their products work better with Cisco’s networking gear? I don’t see a downside for them,’ said Charles Golvin, principal analyst with Forrester Research Inc. ‘If anything it makes their products that much more attractive.'”

Robertson reports, “Gene Munster, senior research analyst with investment bank Piper Jaffray & Co., said talk of collaboration is ‘noble language’ but he is not expecting any blockbuster joint products to emerge from the partnership. ‘Apple wanted that to be the impression because they get a lot of pressure for being closed,’ he said, adding that he suspects money played a more crucial role in the negotiations than either company let on. He estimated that Apple paid Cisco between $25 million and $50 million for rights to the name.”

Full article here.
If you really want to work with Apple, we can think of several better ways than by attempting to blackmail them for chump change, but we can’t think of a worse way. Jobs, if he does anything at all, will probably allow Cisco to collaborate on choosing floor wax for employee restrooms or something equally important.

MacDailyNews Note: Officially: “Under the agreement, both companies are free to use the ‘iPhone’ trademark on their products throughout the world. Both companies acknowledge the trademark ownership rights that have been granted, and each side will dismiss any pending actions regarding the trademark. In addition, 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.”

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Analysts: Apple tops Cisco in iPhone agreement – February 22, 2007
Apple, Cisco gain in premarket trading – February 22, 2007
Cisco and Apple reach agreement on ‘iPhone’ trademark – February 21, 2007
Apple and Cisco again extend negotiations on iPhone name – February 16, 2007
Apple, Cisco close in on deal over ‘iPhone’ name – February 01, 2007
Cisco could be on brink of losing iPhone name in Europe – January 13, 2007
Experts: Cisco lost rights to ‘iPhone’ trademark last year – January 12, 2007
Surprise, surprise, surprise: Cisco demos Apple TV-like device – January 12, 2007
Analysts: Cisco ‘iPhone’ trademark suit likely to have little impact on Apple, to be quickly settled – January 12, 2007
iPhone more than a trademark for Apple CEO Steve Jobs – January 11, 2007
Jim Cramer: Why Cisco really sued Apple – January 11, 2007
Cisco General Counsel explains ‘iPhone’ lawsuit; Cicso wanted interoperability with Apple iPhone – January 11, 2007
Apple calls Cisco’s ‘iPhone’ trademark lawsuit ‘silly,’ says ‘very confident we’ll prevail’ – January 11, 2007
Cisco sues Apple for ‘iPhone’ trademark infringement – January 10, 2007
The only thing really wrong with Apple’s iPhone is its name – January 09, 2007
Briefly: Apple changes corporate name; Cisco expects agreement on ‘iPhone’ trademark today – January 09, 2007
Apple debuts iPhone: touchscreen mobile phone + widescreen iPod + Internet communicator – January 09, 2007

23 Comments

  1. MDN…your blinded by apple, and sometimes it makes you look stupid. If Cisco owned the trade mark, then they owned the trade mark. End of story.

    Cisco is a great technology provider and allowing some interoperability, or perhaps technology “licensing” could be a good thing for future apple products. This is of course as long as everything is “under cover”. As in if the technology from cisco was seamlessly integrated into an apple product. And it wouldnt hurt if Linksys had some Apple support for their router software either. I know you can configure most of their equipment via internal webpage, but some of their stuff, IE: wireless range expander only works with the initial software configuration.

    thats eMax’s take…

  2. Wow, eMax, not true. The point is that while they had the trademark, their use of it was weak. Have you seen all the other companies using the same name? Yes, they’re a big company, but this is to ride coattails.

  3. $25 to $50 mill just to use the “i” with the “Phone”? That’ll be a dollar a phone by the end of ’08, 50ç by end of ’09, * nada * by the end of ’10, about the time the iPhone-killer Phune Service Pack 1 is released.

  4. They both clearly had claims to the TM, with Cisco’s weakened by lack of use, and apparently limited to the US market anyway. So the deal would either be Apple paying Cisco to give up all their remaining claims (which they evidently haven’t) or drawing a line in the sand (like Apple/Apple – not the best precedent, but that’s now an area in which Apple legal have real deep recent experience), with some side clauses, and possibly some minimal payments. If so the interesting issue is perhaps not the money, but whether this will affect Apple providing the iPhone with “Skype”-type internet-based VOIP capacity in a later rev, or whether Cisco have a lock on all VOIP implementation using the TM.

  5. Pure speculation. It would have been much cheaper for Apple to go to court.

    I don’t think they paid a dime.

    Cisco’s claim to the trademark is very weak and I bet they didn’t want to test it in court where losing would have made them look really stupid.

  6. The money was a guess. There may have been no money involved at all. It is also the least important part of the story. The big significance is Apple being interoperative with Cisco gear in the corporate world and the Internet in general. That would be, if true, a big win/win for both companies. My view is that the public face of this Cisco vs Apple story is a misdirection play. We may not know for a long time the real meaning and impact of the agreement.

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