iPhone Name War Over, Victor TBA

The dust has settled around the Apple (Nasdaq: AAPL) and Cisco (Nasdaq: CSCO) battle over the iPhone name, but which company really won?

Earlier this week, both companies released brief statements noting they had resolved their trademark dispute, but they kept the details to a minimum.

"Under the agreement, both companies are free to use the 'iPhone' trademark on their products throughout the world," Apple's statement reads. "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."

The Cisco Advantage

If the statement doesn't mention whether Apple paid Cisco to license the iPhone trademark, and the only thing that Cisco gets out of the agreement is a vague pledge to "explore opportunities for interoperability," how could Cisco possibly have won anything in this battle?

"Cisco didn't want to be in this fight in the first place," Frost & Sullivan Research Analyst Daniel Longfield told MacNewsWorld.

Whereas Apple may have ended up losing in court and being forced to shell out hundreds of millions of dollars to Cisco, the win might have cost Cisco more than the final payment.

"Consumers are so with Apple these days, it would have been bad for Cisco, because consumers don't want to see a company that's going against Apple," Longfield said.

Imagine being the company that had a niche Voice over Internet Protocol (VoIP) "iPhone," and who prevented the release of the Apple iPhone, a device that has worked consumers into a frenzy since its January introduction. Just how much backlash was Cisco worth risking?

While it's difficult to say now, because Cisco was at least willing to take this to court and fight with Apple, Cisco may have gained some respect by holding its ground.

"Cisco saved face," Longfield noted, adding that "Cisco also got a lot of free publicity -- Apple is constantly on TV -- and Cisco will now be seen as a company that will align with Apple and not fight Apple tooth and nail."

Advantage Apple

More to the point, Longfield said, "It's a huge deal for Apple to get this out of the way early. The news this week is that Microsoft (Nasdaq: MSFT) just lost the largest patent infringement lawsuit of all time, for example, and Research In Motion (Nasdaq: RIMM) had to pay the patent holding lawsuit company (US)$500 million for their lawsuit ... so these kinds of infringements can be really expensive, even if you win."

No money was mentioned changing hands between the two companies. However, Rob Enderle, president and principal analyst at the Enderle Group, told MacNewsWorld that he believes Apple paid a nominal sum to make everyone feel better about the deal -- at least to cover legal fees.

Apple did say it would explore interoperability with Cisco, which might help bring VoIP capabilities to the iPhone, but Apple wouldn't necessarily need to work with Cisco to make that happen.

Will Cisco Get Burned?

"Cisco didn't get anything but a bunch of promises from Apple," Enderle explained. "Historically, we know that Apple may promise a lot, but they are not exactly the best about coming through on their promises. Motorola (NYSE: MOT) can speak to that. HP (NYSE: HPQ) can speak to that. We can go down a list of folks, including Microsoft, that has been promised things from Apple that have never come. I think the rule here in [Silicon Valley] is, 'if Apple leaves the table smiling, you better check your wallet.' And Apple clearly left the table smiling."

Though Cisco might have extricated itself from this mess with a possible future collaboration deal with Apple, Enderle believes that Cisco could have gotten a lot more.

"Given that Apple had actually stolen the trademark that Cisco owned, and Apple actually had a product on the market, Cisco had an incredible amount of power in this negotiation," Enderle explained. "To have Apple walk in and pretty much just take it ... it speaks to the amazing skill that Steve Jobs has in doing stuff like this. I can't picture anybody who is negotiating a deal with Apple and isn't scared to death. ... It's one of those things where you sit back in awe of how Apple can pull these kinds of things off time and time again."