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iPhone Watch, Day 6: “You rub it, it’ll grant you three iWishes”

January 15, 2007

The news on the Apple iPhone is still coming in hot and heavy. We continue our iPhone Watch coverage here on Day 6 A.M. (after MacWorld). We’ve got the latest news on Cisco’s trademark lawsuit, the iPhone’s 3G capabilities (none, but wait…), Apple’s lawyers on the warpath against non-iPhones, Cingular stores in the dark, some funny videos from SNL and Colbert and more!

Cisco's iPhoneOff we go!:

bullet CISCO-OH, NO!: In what could be one of the biggest biz blunders of the short year so far, it’s been reported that Cisco Systems may have lost their trademark protection for the “iPhone” name. This came out AFTER Cisco announced they were suing Apple for trademark infringement.

Rule no. 1 when suing … make sure you’ve got the (trademarked) goods!!!

Cisco currently makes an VoIP (voice over Internet protocol) product called the iPhone, and it was recently reported that Cisco and Apple were in negotiations over licensing that supposedly-trademarked name for the new Apple phone.

Now we see why Apple didn’t follow through with that process…maybe they saw the hole in the Cisco iPhone trademark armor.

Speaking of which….coming soon…iPhone armor! (I’ll trademark that idea, just to be safe)

Also, a London Times report today says that Cisco wanted “access” to the iTunes Music Store infrastructure in exchange for the trademark, which it appears Apple wasn’t willing to give.

Ed Burnette’s blog at ZDNet does a pretty good rundown of the situation, examining how Cisco failed to meet a requirement to keep their trademark.

From Burnette:

This information indicates that Cisco did not actively offer a product named “iPhone” between 1999 and December 2006. But they knew Apple was interested in the name because Apple had approached them and negotiations were ongoing. Jay Behmke writes:

If Cisco didn’t launch a product using the iPhone name, their trademark registration would be canceled and they would have no bargaining chips with Apple. So in order to keep the trademark active, they had to file the Declaration of Use, and start selling a product under that trademark.

It is possible that the Declaration of Use is defective, as there was no continuous use, and the sample that Cisco submitted was for a product not released until 7 months later. The fact that the Declaration of Use was submitted only days before the deadline expires gives me the impression that they were scrambling to get a product to market, and had to file the Declaration before the product was ready.

If Apple can prove in federal court that the Declaration of Use contained misstatements of fact, i.e. that there was no continuous use, then Cisco’s registration can be canceled. This could clear the way for the next company in line for the iPhone trademark, Ocean Telecom Services LLC (widely regarded as a front company for Apple). It could also explain why Apple decided not to sign the agreement Cisco proposed.

Apple has already come out and said that Cisco’s suit is “silly” and that their claim is “tenuous at best.” Who knows if the Apple statement included jokes about Cisco’s mom as well?

Cingular logobullet CING-ING THE BLUES? NOPE…: Seems like Cingular isn’t too upset about its “concessions” to Apple to land an exclusive deal for the new iPhone.

During his press conference, Jobs announced that Cingular had made changes to its network just for Apple to allow widgets and the new “visual voicemail” feature.

But in PC World, Cingular’s CEO believes that they got the best of Apple, the report says:

When asked about a give-and-take leading to the Apple-Cingular partnership, Lurie said, “I’m not sure we gave anything.”

Later, he commented, “I think they bent a lot.” That bending included allowing the phone to be locked to Cingular, just one of several restrictions on the new iPhone. Press reports today said the phone will not accept third-party applications, though Apple may allow third parties to program mini-application “widgets.”

“If you want an iPhone, you are going to get the luxury of being on the Cingular network,” Lurie said. While the Cingular logo will not appear on the body of the iPhone, the word “Cingular” will appear on the screen at all times. The contract covers “all models” of the iPhone, including several other devices in the works that may be “coming out very quickly,” Lurie said.

His comment addressed in part a criticism that the iPhone doesn’t use Cingular’s new high-speed HSDPA network. That isn’t true worldwide, as Cingular only exists in the US. Apple is free to seek other partners for global distribution, he said.

Most notable from the PC World story is the following segment, that states that Apple can make a Wi-Fi only version of the phone without restrictions:

And Apple is also free to build other iPods without phone capability that won’t be sold through Cingular—though he was unclear on whether a Wi-Fi only version of the iPhone would fall under Cingular’s thumb.

While “there are bad guys out there that unlock phones,” Lurie said, Apple and Cingular are taking unspecified steps to make the phone more difficult to unlock and use on other GSM carriers in the US.

bullet iDON’T KNOW: Cingular also confirmed to the site that there will be NO outside sales of the phone without a two-year service agreement. That’s for sure. Meanwhile, those flocking to Cingular stores to get on a wait list (or get ANY info) are out of luck, according to The retail stores seem to be in the dark about anything iPhone, which is unfortunate, since the announcement generated tons of publicity for them.

IPhone with fishbullet FREEEEEEEDOOOOOM!: CNET’s Crave blog took a 13-point look at the iPhone’s deficiencies. And the one about “user freedom” caught my eye most.

8. Will Apple give the user any freedom? Want to know why there’s no memory card slots on the iPhone, nor will there likely be a user-replaceable battery?

Because Apple doesn’t want you to lay a finger on its phone without paying the piper.

Anyone who owns an iPod knows how hard it is to replace the battery, replace a dead hard drive, or fix the thing without going through Apple. Anyone who owns a Mac computer also knows how hard it is to upgrade any internal components without going through Apple. If you can figure out how to do these things yourself, you’ll break the warranty. If you go through Apple, you’ll probably have to give them more money in the process.

The iPhone is likely to be no different. To fix it, you’ll probably have to bring it to an Apple Store. To expand it, you’ll probably have to buy a new iPhone.

Note: iPhones are still expensive.

While we’re on the topic of user freedom, what about the software aspect of the phone? It’s unknown whether users will be able to write their own software or run third-party programs on the iPhone without breaking the warranty. It’s quite possible that the iPhone’s only programs will be Apple iPhone programs.

I take a bit of issue with this point.

First, iPhone users should be fine with 4 or 8 GB of flash memory, and non-iPhone users usually only upgrade their memory with a 2 or 4 GB flash memory card, so Apple wins here.

And about the battery…you know that’s an Apple hallmark going in, no use complaining about it now. How many iPods have we all bought?

Second, I agree with the software aspect. If I get the iPhone and there’s no Skype widget available, that will really steam me.

But in the end, isn’t the PHONE the main reason you are buying this thing? But, only about 100 or so reporters have actually HEARD a call on this device…so phone call quality remains to be seen. (See my previous post about why the non-phone features are NOT the reason to buy the iPhone.)

bullet 3G COMING IN V2.0?: Also, another complaint Crave has about the phone is the lack of 3G network support. Well, according to Gizmodo, it may be coming in the second version of the phone. According to the report, an Apple engineer said the missing 3G service was due to Cingular’s network, which has only 1% 3G network coverage in the USA.

Gizmodo also did a nice look back at the string of iPhone fakes from around the net.

bullet JOBBING THE BOX OFFICE: While Paramount/Viacom agreed to sell part of its movie library on the iTunes Music Store, many other studios are balking due to Apple’s rules for distribution, and supporting the big-box stores in the battle for DVD sales vs. online download sales.

JobswithphonepricesThe main two sticking points, according to BusinessWeek’s Ronald Grover, are PRICE and DRM:

Paramount may eventually give Apple its hot new flicks, but not yet and not until it sees how its maiden iPod voyage goes. But as Jobs was making his starlit announcement at Macworld, I was several hundred miles away in Las Vegas, getting the lowdown at the Consumer Electronics Show from studio executives who aren’t likely to join Paramount and Disney anytime soon.

Hollywood, I was told, still doesn’t trust Steve Jobs with its crown jewels. Yes, everyone loves that ratings for shows like NBC’s (GE) The Office and ABC’s Lost seem to be up thanks to the promotional exposure of being available via iPod download. But while just about every TV network quickly followed Disney’s 2005 decision to give its TV shows to Apple, few have yet to join the Mouse with movies. When you have a piece of content than can cost upward of $100 million to produce, you don’t give it up without a lot of soul-searching and number-crunching.

What does Hollywood want from Steve Jobs? For starters, more protection for their films. “His user rules just scare the heck out of us,” one studio executive told me. Indeed, under Apple’s video iPod digital-rights-management scheme, folks can share their flicks with as many as three other iPod users.

Balking at Movie Download Prices

That’s good for the guys who get free flicks, but it’s bad for Hollywood, which goes bat crazy over the notion of pirated freebies on the Internet. To them, losing a customer courtesy of the video iPod is just as bad. Add into the equation the new Apple TV, which would allow folks to put that movie on their TVs, and Hollywood sees more and more of its DVD bucks headed out the door.

Then, there is the issue of price. Charging $14.99 for new flicks and $9.99 for older ones, Jobs clearly wants to undercut big-box retailers like Wal-Mart (WMT) and Target (TGT), which sell the great majority of the newer DVDs these days for as much as $19 a pop.

That’s a bad move on Jobs’s part. Both Wal-Mart and Target have made their feelings known about being undercut by Apple. Big surprise—they’re not happy about it, and Hollywood has been paying attention to these all-important retailers.

I really think that the AppleTV product, the new Microsoft XBOX IPTV and future IPTV offerings from the large cable companies (Comcast, Time Warner, etc.) will help push the issue and bring the movie studios to Jobs’ door.

In a world where high-speed broadband is getting more and more market share, I can’t see this “on-demand” entertainment world being held back much longer.

bullet NO! TO WINDOWS iPHONE: So what if you already have a Windows smart phone and don’t feel like switching, but want to be cool with your kids and the Mac crowd? You can download this skin to make your phone’s user interface look like the iPhone. Neat, huh?

Well, it wasn’t for the Apple legal team, who threatened to sue the blogger who posted the link to the interface. ZDNet has the story on the legal maneuvering.

Here’s the link to the “iPhony” interface, as it stands now. Get it before it’s outlawed!

bullet AND FINALLY, iVIDEO FUN: Leave it to Saturday Night Live to do a funny humerous slightly chuckle-worthy parody of Steve Jobs’ iPhone announcement on Weekend Update (this link may not be here long, due to copyright…which is ticking off NBC’s lawyers). I liked the first Jobs parody about the new iPod video better:

Cranky geek John C. Dvorak rails on the Consumer Electronics Show on CNBC:

Not to be outdone, Steven Colbert of “The Colbert Report” is “flacid with rage” about the iPhone and the decline of FORTRAN 77 (link here).

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  1. January 17, 2007 10:25 am

    Interesting article about Cisco going after Apple…What about Linksys to, or did they come first?

    Boy did Apple start something with the letter ‘i’. I only wish ‘me’ was was cool 😉


  2. January 17, 2007 10:35 am

    Linksys is a brand of Cisco Systems, mostly for consumer and home routers. Cisco markets to IT and business-grade customers.

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