Apple, the maker of iPods and owner of iTunes, settled a trademark dispute late on Wednesday with rival Cisco Systems over the use of the name 'iPhone'.
NEW YORK: Apple, the maker of iPods and owner of iTunes, settled a trademark dispute late on Wednesday with rival Cisco Systems over the use of the name 'iPhone,' a vital deal for the US technology group as it prepares to enter the handset market.
Apple chief executive Steve Jobs had sent waves through the telecoms industry on January 9 when he unveiled the iPhone, the latest Apple product that serves as a mobile phone, a camera, music player and Internet device.
The California-based group is hoping its reputation for sleek design and simplicity can help it dominate the handset market in the same way as its iPod has become the reference for portable music players.
Cisco Systems, a US computer network giant, had sued Apple in a bid to prevent the group using the brand name, claiming it had owned the iPhone trademark since 2000 and had been selling phones bearing the name since 2006.
In a statement released late Wednesday, the Silicon Valley companies said they had had settled their dispute out of court and were both "free to use the 'iPhone' trademark on their products throughout the world."
The statement added: "Both companies acknowledge the trademark ownership rights that have been granted, and each side will dismiss any pending actions regarding the trademark."
No financial details were provided and all other terms "are confidential," the brief statement read.
The groups did say however that they would "explore opportunities for interoperability," which analysts believe could lead to an eventual combination of the Cisco and Apple iPhones.
Cisco's iPhone is a handset for Voice over Internet Protocol (VoIP), enabling users to make free or very low-cost calls over the Internet using software provided by companies such as Skype.
The Apple model, scheduled to be launched in June, is to connect callers over a regular mobile network connection, but has the functionality of a phone, an iPod, a camera and a Blackberry-style personal organiser.
Analysts said both sides would win from the friendly agreement, with Cisco benefiting from the marketing power of Apple and Apple avoiding a costly legal battle and possible delays to the launch of its phone.
Apple and Cisco had been negotiating for months before Steve Jobs unveiled the iPhone product at the Macworld convention in San Francisco without an agreement between the companies.
Cisco claimed it took ownership of the iPhone trademark through its acquisition of Infogear, a US-based Internet and software group, in 2000.
Cisco Systems designs and sells networking and communications technology and services under the brands Cisco, Linksys, and Scientific Atlanta.
Apple Inc. until January known as Apple Computer Inc., develops and sells personal computers and accessories such as portable music and video players.
Earlier this month, Apple settled another trademark dispute.
Apple had been at odds with The Beatles for more than 25 years over the use of "Apple" as a name and logo.
The Beatles laid claim to the Apple trademark through their multimedia company Apple Corps and had planned to appeal legal action lost against the California-based computer group in 2006.
The settlement between Apple Inc. and Apple Corps handed Apple ownership of all trademarks related to "Apple".
Apple agreed to licence certain trademarks back to the Beatles' Apple Corps for their continued use.
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