Tuesday, December 19

Branding Wars Ahead

What's in a name?

Last July, BusinessWeek reported that Apple's global brand value was up almost 14 percent over 2005, placing it 39th among all globally recognized brands. The publication also estimated Apple's total brand value at almost $9,130 million, fueled largely by stylized iPod, iTunes, and iMac product lines. With that in mind, it was no surprise that Apple was rumored to be releasing an "iPhone" sometime in 2007.

What is a surprise: Linksys (a division of Cisco Systems, Inc.) launched an "iPhone" family of products for the holidays. But, despite boasting Internet services that use Skype and Yahoo! Messenger, most reviews have been less than stellar and include the added pressure of Cisco being accused of "stealing" an Apple brand identifier.

Russell Shaw over at ZDNet has a comprehensive overview of the proceedings (which does not include Apple) along with various filing reports. What he did not note, however, was that Cisco filed its "iPhone" trademark 10 years ago, with the mark published for opposition as early as Dec. 1998. That seems to predate most Apple "i" products, with exception to the iMac.

Still, it's a safe bet that Apple is hoping the Linksys phone might eventually get an unfriendly call from the U.S. Patent and Trademark Office, which is currently sorting through four "live" trademark assignments that include "iPhone" or derivative terms. It seems to me that Apple's wish would have less to do with the name of its future phone and more to do with any brand damage caused by a Linksys "i" product that is less phone (as the original application suggested) and more VoIP.

Simply put, Apple might not want to be associated with it. Even more ironic, Cisco's decision to rightfully use a trademark it has owned for 10 years might backfire anyway, forcing the company to spend millions in repackaging. You see, while the "iPhone" might be their trademark, Apple's brand mastery over "i" products has grown exponentially in 10 years.

In the end, Cisco, right or wrong, knowingly or unknowingly, has started a brand war. And, like all wars, there is hardly ever a clear winner when the smoke settles and investors wonder what they got for it. It seems to me that Apple would be wise to sit this one out, letting the others fight it out for the right to use a trademark that Apple might not own, but clearly dominates. Besides, Apple may have never intended to call its product an "iPhone" anyway.

2 comments:

Rich on 12/21/06, 10:47 AM said...

Famous Last Words:

On that note, sources recently explained that it may be more accurate to consider {an Apple] iPhone as an iPod with phone capabilities, rather than a phone with iPod functionality. Accordingly, the phone is likely to serve more as an extension of the iPod brand than as a separate brand. Thus, protecting the iPod's "premium" brand identity is of critical importance to Apple as the company gears up to enter the phone market. — PC Magazine

Rich on 1/9/07, 1:03 PM said...

Famous Last Words? Maybe.

“iPhone is a revolutionary and magical product that is literally five years ahead of any other mobile phone,” said Steve Jobs, CEO of Apple. “We are all born with the ultimate pointing device—our fingers—and iPhone uses them to create the most revolutionary user interface since the mouse.”

Read the release at Apple.

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