Tuesday, December 19, 2006

Cisco beats Apple to iPhone

OTTAWA - It's all about timing.

After months of speculation that Apple Computer was about to add a cellular phone to its long line of ``i''-products, the giant computer maker has been beaten to the punch by Cisco Systems Inc.

Linksys, a division of Cisco, released the iPhone Monday. The new device is a telephone that works over the wireless network within a person's home to make cheap phone calls over the Internet.

Marketing analysts say the new product could pose problems for Apple _ which, until now, has had a monopoly on the ``i''-brand with popular items such as its iPod line of MP3 players.

``This is going to make it trickier for Apple to establish their own iPhone _ it's going to have to look, feel and sound very different in order to be distinguished from the Cisco one,'' said David Dunne, a marketing expert at the University of Toronto's Rotman School of Management.

``In business, there is a certain amount of first-mover advantage. People remember the first thing they see.''

With the announcement, Cisco revealed it's been holding onto the registered name of ``iPhone'' since it took over a company called Infogear in 2000. Infogear had released a previous version of the iPhone in 1997, but sales of the phone weren't impressive.

Dunne said Cisco's new product is likely a calculated attempt to benefit from the popularity of the ``i''-brand established by Apple.

``It looks as if they're basically trying to sew a little bit of confusion and defend their own franchise,'' Dunne said of Cisco, adding the company is also looking to benefit from Apple's copyright miscue.

``In hindsight, not locking in the trademark on iPhone seems like quite the misstep on Apple's part.''

Gadget lovers have been eagerly anticipating a phone offering from Apple for months. Aside from iPods, the company already has its iBook laptop computers, its iTunes music store, an iMac line of computers, and numerous ``i'' accessories such as the iSkin cover for iPods.

Dunne said Apple has been trying to plug its ``i''-products as a free-standing brand, but they may have to change tactics.

``They may have to reintroduce the Apple brand name,'' he said, noting the company could opt to trademark their own future phone as an ``Apple iPhone'' in order to differentiate it from the Cisco product.

While Apple has not confirmed it is working on a mobile phone, company chief executive Steve Jobs is expected to make an announcement about the company's move into cellular telephones at the annual Macworld Expo in San Francisco on Jan. 9.

Ottawa Citizen

© CanWest News Service 2006

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