Wednesday, January 10, 2007

iPhone: "Apple reinvents the phone" . . . but recycles the name

While CES is going on full steam in Las Vegas, practically everyone in the Bay-Area, as usual, is going ga-ga over anything that Steve Jobs releases. Apart from the completely lame and three-year too late AppleTV, Apple's new ridiculously expensive "iPhone" has created some news, both good and bad.

As I listen to the masses prostrate to Jobs, I've learned a very good lesson: Apple doesn't deserve the benefit of the doubt under any circumstances.

It turns out that Apple doesn't even own the trademark "iPhone," in the United States, but chose to release the product anyway. Linksys actually created a line of VoiP-based phones called the "iPhone" a little while back. And this comes as no surprise to Apple, either. In fact, Apple has been negotiating with Linksys (owned by Cisco) to license its "iPhone" trademark and these negotiations have been going on for TWO YEARS. They had been negotiating, a Cisco spokesman said, as late as last Monday night.

So, what did Apple do? It broke off all negotiations, didn't send Cisco a signed agreement, and decided to use the mark anyway. In response to a lawsuit filed in federal court by Cisco, Apple now says that it doesn't need permission to use the mark.

Now let's be clear. There is a legal issue here (whether Apple is legally allowed to use the "iPhone" mark without permission for its smartphone without infringing Cisco's rights), the answer to which is basically irrelevant. Regardless of whether Apple wins on this pure legal issue in Federal Court, Apple has proven itself as a company not worthy of my respect.

Nor does it really matter how clean Cisco's hands are. Many speculated that Linksys released its own line of iPhones a year ago because it heard a lot of talk about Apple releasing its own phone product. Thus, releasing its own product in anticipation of Apple's release gave Linksys an instant seat at the bargaining table for license money or--more specifically--a piece of the Apple iPhone revenue.

Apple might win this case, but it has and will continue to lose a whole lot of credibility and business goodwill. It is too high of a price to pay. The problem here is that Apple can't effectively paint Cisco as an opportunistic rentseeker, especially not when Apple itself was asking Linksys for permission (seemingly not in good faith) to use the mark for the last two years, only to turn around at the last minute and launch its product.

A circumstantial musing: if Apple is really so intent on keeping the 'i' in front of its product offerings (like iLife, iMac, and iPod), then why didn't it name its new lame TV product "iTV" instead of AppleTV? Or, why didn't it call its phone the ApplePhone?


Chris said...

Don't Cisco's demands seem relevant? I know very little about IP law and even less about Apple's backroom negotiations, but it seems possible to me that if Cisco was unwilling to negotiate in good faith, Apple has no recourse except for a lawsuit — they just had to decide between being a plaintiff or a defendant.

Anonymous said...


I m more interested inits funtionality?
is that good?
worth the money?

kindly reply to