Apple has proved to be a marketing genius of a company over the years, but they have also made some rather silly and sometimes juvenile mistakes, like taunting The Beatles into litigation by naming their music software with a name that sounds like “Sue Me.”

This week they may have made another juvenile mistake with the launch of their iPhone.  It appears that they failed at least to get all of their ducks in a row.  According to reports from Cisco, Apple and Cisco had been in talks concerning Apple’s use of the iPhone trademark owned by Cisco, who recently released a VOIP phone with the same name.

It would appear that the parties were close to a deal.  However, close is not typically considered good enough for most corporate lawyers and so when Apple rushed to launch their iPhone at MacWorld without first signing a release from Cisco, Cisco seemed to have little if any other choice than to sue Apple to protect their trademark or risk defaulting on it all together.

Apple responded with indications that they thought Cisco was being silly and that they were the first to offer a cellular phone with the name of iPhone as opposed to the wireless phone that Cisco had offered with the same name.

Let’s hope that Bill Clinton doesn’t represent one of these companies in a battle over the definition of what “is wireless” and what “is cellular.”  The technologies are obviously distinct, but this would raise other questions of products that are similar, like a sandwich shop that offered a Whopper of a Submarine sandwich.  Could they argue that a submarine sandwich named the whopper is nothing like a Burger King Whopper that is a grilled cheese burger?  What if the whopper comes with Lettuce?

Regardless Apple seems to have embroiled if not invited itself into litigation that is frittering away shareholder value.  As such it would seem that they may have been in a rush to launch this product and may have phoned in the iPhone like they phoned in the iRokr.

Maybe Apple just isn’t ready to play in the phone market?

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I’m going to cover the new Apple iPhone in several articles as there are many different angles to consider for this device.  I’m going to start by laying out my assumptions on the product and the industry in this first article.

Apple Computer had built up a great many years of experience in the personal computer industry that they helped launch after receiving a vision of what the personal computer could be from Xerox PARC.  That early vision and many years of dedicated hard work and marketing led to the successful launch of their 1984 campaign.  Yes the marketing was key, but it was backed by almost twelve years of research and experience. 

Apple later offered up the iPod in 2001.  They moved into a market full of many different MP3 players and devices.  They later settled a lawsuit with Creative over technologies that they had apparently received a vision within the creative devices.  Apple leveraged this vision from Creative along with its excellent personal computer platform, marketing skills, and product design skills to launch the product and the iTunes service, convincing its customer base that it was cool again to pay for music at the pre-established industry rates of approximately $12-15 per CD.  The primary difference came in the form that buyers could by one song at a time.

Apple has now watched for several years as cell phone makers have begun to offer MP3 players of many varieties including an iTunes variety have entered the marketplace.  Apple had to enter into the cellphone business or face a converging force of cellphone MP3 players that would eventually remove the iPod to a level of obscurity recently witnessed by Palm PDA’s.

Apple made a serious false start in this direction stumbling over the iRokr in a collaboration with Motorola, that left both companies embittered and pointing fingers at each other.  Almost two years later Apple has now offered up an Apple iPhone and immediately launched itself into controversy.  A new lawsuit from Cisco, that owns the Trademark to the name iPhone is reminiscent of the 25 year legal battle between Apple Computer and Apple Corps. 

It should also be noted that Apple has not been entirely on its game this last year.  Its been restrained by a legal quagmire that has brought to light a stock options scandal.  The scandal led to an internal review by Apple, which has absolved Steve Jobs of any wrong doing.  However, the Justice Department of the United States, an external legal body that does not play to the tune of the Apple Board of Directors, announced that it is investigating the situation further as they prepare to question lawyers no longer employed by Apple.

Regardless of whether or not this new external legal investigation turns up anything, the entire scandal and investigation has been a large distraction for Steve Jobs and for Apple as a whole.  With these distractions occurring at almost the same time the company has prepared to launch what Steve Jobs considers a device as important to Apple as either the Mac or the iPod, we have to wonder if Apple may have missed something in this new device.

Many people have held MP3 players up to the standard of whether or not they will be iPod killers.  The truth is probably one that the iPod like any consumer electronic device has a predestined product life cycle.  It is not necessary to kill the iPod as it will die a slow and natural death of its own.  The iPhone will only serve to slightly extend this life cycle if it does anything at all.

In addition to all of these background items, its important to consider that Apple partnered with Cingular Wireless, which will be rebranded under the AT&T name this year.  Cingular as a brand name has held up a certain cool factor with youthful buyers.  However, AT&T, while it has a huge amount of brand recognition, definitely does not have a coolness associated with it.  In fact it could more aptly be associated with the dinosaurs of technology.  Apple has provided some undisclosed exclusivity arrangement with AT&T(Cingular) and this apparently has constrained the design and functionality of the device, a fact that we will cover in future installments.

Since the iPhone will be limited in distribution to AT&T customers, we have to wonder right away if the product will have much impact at all.  AT&T’s wireless business is large, but it does not cover the entire USA not to mention it has very little play outside of the United States.  This leads us to wonder if Apple in its distraction may have sold its soul to get the iPhone project out with a carrier that would accept it, under a trademark name owned by a different company where negotiations had failed, and at a price that will cost $400-$600 to get the device out of the store with a minimum two year contract at a monthly service fee of at least $80 per month.

At the end of the day how many people really will buy an iPhone for close to $2,400 when they could just as easily buy a Nano and a cell phone for less than $200 total on a $30 per month cell phone plan for a total 2 year cost of $920.  Is the iPhone really going to be worth a $1500 premium for Early adopters?  For Anyone? 

We’ll explore this greater detail as we proceed forward covering the Apple iPhone.

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This week I attended the Consumer Electronics Show in Las Vegas, Nevada otherwise known as CES 2007.  By most accounts the show was a success.  The show has grown to cover the entire Las Vegas Nevada convention center, spread to the Hilton and this year spread to include most of the Sands Convention Center as well.

This year CES saw 2,700 exhibitors showing their goods, services and hot new products to a record number of 140,000 attendees visiting the show.

However, the hottest new product of the convention proved to be no show as it was on display in MacWorld in San Francisco under the heatedly contested name of iPhone.  Apple unveiled the iPhone at MacWorld and largely stole some of the thunder from CES, not to mention embroiling Apple in a trademark dispute over a name they do not own.

Cisco does own the trademark and had released a product called the iPhone just a few days before both shows.  (Read more about the iPhone from Linksys a subsidiary of Cisco under The iPhone iBluff from Apple.)

Despite the absence of Apple’s iPhone from CES there were many noteworthy products and services that we have gathered information on and will initiate coverage on here at Maven Mapper’s Information.  History in the consumer electronics field has shown that the hottest products are not the only product.  We will labor to provide you with some of the other products that could make an even larger contribution to your life than another cell phone might or might not provide.

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The results of the internal Apple investigation have been released.  The end result is that Apple will incur an $84m loss resulting from improperly recorded options from 1997 through 2002.  There were a total of 6,428 options granted inappropriately over 42 different dates.

Steve Jobs did recommend or know about several of the options that were recommended to maximize gains for other individuals but not himself.  The option that has raised eyebrows that was incorrectly recorded was reviewed initially by the board in October of 2001, but terms were not finalized until two months later in December at which time someone (undisclosed) backdated the option to the original date in October.

Questions Remaining

The total amount found would not appear to be material if $84m is the correct amount.  This leaves questions as to whom if anyone the SEC may pursue in this affair.  As the report indicates that Steve Jobs did recommend several of the dates for others, this may make him culpable if its found that those individuals reciprocated in some manner.  The board has indicated that they are willing to look beyond this possible fiduciary indiscretion and will continue to support Jobs to the relief of investors.  Then there is finally the question of whether or not the SEC or external investigators that is will trust the findings of internal investigators or perform their own search.  Will these findings by Apple open the door on this scandal or lock it up tight?

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Retailers have long experienced the pains of high demand during the holidays for their products.  They do everything in their power to stock up and provide just enough product to sell to every single buying consumer that walks through the door.

Apple’s iTunes Store however experienced a different type of stockout problem over Christmas.  They stocked out of bandwidth as they experienced a surge of download requests from new iPod users that have recently converted to the the iPod players.

For these new converts their out of the box experience may have been somewhat diminished by the surge in downloaders visiting the site coupled with the poor state of the internet following the communications disruptions in Asia that resulted in a significant amount of rerouting of internet surfers as people and companies attempted to run backup plans to maintain their world wide access to the web.

Not to mention Apple has been distracted this fall by an SEC probe into alleged stock options backdating that could result in a criminal prosecution of the company or of individuals in the ranks at Apple.  This stockout of bandwidth may have occurred in something less than a perfect storm of problems for Apple, but at the end of the day it will prove to be an area that should be improved in the future regardless of the excuse and cause.

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Steve Jobs may have led Apple out of a near death experience.  He may have even delivered the goods this last holiday season as many new iPod converts flooded Apple Stores creating long lines and increasing the bandwidth demands creating download delays.  However, if the forms were not followed to meet the ethical requirements demanded by the SEC and investors seeking to place their trust in a company in the form of investment dollars, Jobs might end up out of a job even after he proved he could get the job done.

Investors have a love love relationship with Jobs and the price reflects their trust that he can continue to deliver.  However, today the stock was battered down by 2% after disclosures that a stock option granted to Steve Jobs himself was not approved by the board of directors and that papers were doctored to indicate that the board had provided approval for the options.

This revelation seems to have pushed Jobs towards retaining his own counsel for an investigation that might turn its focus on him personally.  In October an internal Apple investigation concluded that Jobs may have been aware of a few backdating situations but had not himself been the beneficiary of financial benefits resulting from backdating.  This new revelation might prove to be a wink link in Jobs’ armor or it might prove to be a red herring to distract investors and regulators away from the question that probably should be more important. 

Why was Jobs not aware of the backdating and why did he not institute controls, oversight and mechanism to prevent abuse?

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As we rapidly approach MacWorld where analysts and speculators have been hinting at the likelihood of the unveiling of the Apple iPhone recent events and a more skeptical review of history make us wonder if Apple may have been bluffing in the secretive way about the future existence of the iPhone.

The iPhone was released today to the market, but it was not released by Apple.  Apple does not own the trademark to the name iPhone.  That name has been owned by Linksys for ten years now.  Linksys exercised their trademark by releasing a series of VOIP phones under the iPhone brand name.

Apple couldn’t use the name if they wanted to because they do not own it (Yeah don’t get me started about The Beatles that horse is dead.)

When we let it sink in that Apple is not allowed to release an iPhone we then start to question their capabilities.  After all Apple has a poor track record in the cellular industry.  They failed to collaborate with Motorola with the iRokr and ended up spitting out a lemon.  Apple pointed the finger at Motorola at the time and distanced themselves from the product, but it was their product to and they shared in the build.  Plus, Motorola went on to successfully show the world that they do know how to build sexy and sleek phones, when not encumbered with an Apple partner.

If Apple could not successfully work with the oldest cellular manufacturer in the world to come up with a good product, can they really do any better on their own?  If their first attempt was a lemon will history repeat itself.  If they can’t even envision a brand strategy ahead of the launch of a product, what does that say about their product planning capability.  Apple does want to win, but they do not always seem to be prepared for success.

After the success of the iPod, they went in after the fact this year, five years after the launch, and started lawsuits against a number of companies using the name “pod” in their company name, product name or elsewhere.  Apple tried to claim that they owned the word pod in all of its forms and derivatives.  If they did, why didn’t they trademark it ahead of the launch of the iPod or even soon after. 

Was Apple prepared for their iPod success or were they throwing darts at a wall?  MacWorld should be interesting this year, but its now very very unlikely to provide the unveiling of the “iPhone” at least not from Apple!

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I’m sure many of you have seen the series of ads from Apple where they put the Mac guy (rumored to have been fired or quit) together with the PC guy, where they then proceed to talk about their existence as dedicated Mac and PC users.

Well here is an ad for the Zune flipping the Mac v PC ad by comparing the Zune to the iPod.  Just remember to watch where you point that thing . . .

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No one likes their conversation taken out of context especially in court, so it has to be a little embarrassing for Windows Development Chief James Allchin to have been quoted from his email to Bill Gates and Steve Ballmer as saying that he’d rather buy an Apple Mac if he didn’t work for Microsoft.

He states today that he sent the email in 2003 to make a point and push Microsoft to make dramatic changes in their development of their operating system that today is known as Vista.  He also says that those changes were made and the OS is better than it would have been.  His comments and others stating that Microsoft had “lost sight” of customers needs were revealed in some of the remaining anti-trust cases looming in state courts against Microsoft.  These statements may have been dramatic at the time and are probably no less dramatic now.

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