CISCO Systems and Apple have agreed to share the iPhone brand, dismissing Cisco's lawsuit for trademark infringement.
The agreement allowed both companies to use the iPhone name and called for their products to work together in the future, the companies said yesterday.
The settlement ends a six-week dispute between the Silicon Valley giants and puts California-based Apple on schedule to start selling its combination iPod music player and mobile phone under the iPhone brand in June.
The decision comes two weeks after Apple ended decades of litigation with the Beatles over rights to use the Apple name and logo.
"IPhone is worth a hell of a lot more to Apple than to Cisco," said John Daniel, a partner at New York law firm Kramer Levin Naftalis & Frankel. "The 'i' prefix is what Apple has been developing, and if it didn't have that, it would be unhappy."
Cisco, the world's largest maker of computer networking equipment, claimed last month that Apple's iPhone violated a trademark owned by Cisco since 2000. Apple called the suit "silly" because its iPhone differs from Cisco's internet-based home phone.
Apple approached Cisco about using the name several times during the past year and announced the product before an agreement was reached, according to a blog posted by Cisco general counsel Mark Chandler.
Apple still faces possible delays in Canada where Comwave Telecom has used the iPhone brand since 2004 to sell web-based phone services.
Comwave said in January it had filed documents opposing Apple's motion to take the name.
Apple chief executive Steve Jobs said last month he expected to sell 10 million iPhones, which cost as much as $US599 ($754) apiece, in 2008.
Cisco's iPhone is part of its Linksys home routeing unit, which it purchased in 2003 to tap the consumer market. The phones, which sell for $US100, enable web-based calls through Skype and Yahoo's Messenger.
Interoperability? This isn't Apple's business model.