Cisco Systems and Apple Computer have finally called a truce, and will share the 'iPhone' name in exchange for exploring 'interoperability' between the companies' products in areas such as security, consumer, and business communication.

Both Apple and Cisco have said they will dismiss any pending legal actions regarding the 'iPhone' trademark, but continue to remain tight-lipped about future products that might come out of the 'interoperability' deal.

On Jan 10, 2007, just a day after Apple CEO, Steve Jobs, unveiled the company's much awaited iPhone, Cisco slapped a suit against Apple, alleging that the latter's use of the 'iPhone' name constituted a 'willful and malicious' violation of a trademark Cisco has owned since 2000.

And, Cisco's Linksys division has been using the 'iPhone' trademark for a series of phones that make free long distance calls over the Internet, using Voice over Internet Protocol (VoIP).

In its lawsuit, Cisco said that in an era of 'convergence', the two companies' phones could eventually take on different features and end up competing head-to-head. Cisco said this would result in confusion, mistake, and deception for consumers.

Apple dubbed the suit 'silly' initially, arguing that it was entitled to use the 'iPhone' name as the phones belonging to the two companies operate over different networks, and as such, would never compete with each other.

Meanwhile, analysts say the settlement will help both companies strengthen their positions in the increasing competition to deliver video and other applications via the network direct to consumers' homes.

One network infrastructure analyst with the Yankee Group, Zeus Kerravala, voiced the view that there are ample opportunities for the two companies to dream up collaborative projects to win over consumers.

He cited one possibility as the creation of a Linksys device that users could call into to record podcasts, which could then be uploaded onto iTunes automatically.

Kerravala said that if the two companies could actually find common ground and work together, the combination would be a formidable one unlike that in which both are continually at loggerheads with each other.

Kerravala pointed out that after all, there's no company out there that understands network service like Cisco, and no other company that quite understands user experience like Apple Computer.

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