updated 06:50 pm EST, Fri January 12, 2007
'iPhone' could cost $325m
Industry experts say Apple may be forced to pay hundreds of millions of dollars in royalties to Cisco for its iPhone trademark after launching the new device on Tuesday morning without first coming to a steadfast agreement with the networking giant. Cisco filed suit against Apple on Wednesday over the iPhone name, which Linksys -- a unit of Cisco -- just recently used for its new line of phones. Financial analysts predict that the iPhone could bring as much as $6.5 billion in revenue to Apple by 2008, but licensing fees could cost the Cupertino-based company from $130 million to $325 million per year. Those royalties could amount to more than a billion dollars over a five-year period, according to the Red Herring, representing more than 15 percent of Apple's net income for the fiscal year of 2006. Amidst speculation from financial experts and industry analysts, however, one blogger suggests after some investigation that Cisco may not own the trademark as it claims, and that the iPhone name appears to have been abandoned in late 2005/early 2006 because Cisco failed to use it.