Cisco is understood to have demanded access to Apple’s closed media distribution service, the online iTunes store, in return for sharing the "iPhone" brand name at the centre of a trademark dispute between the two groups.
Negotiations between the two groups, which have been taking place since at least Christmas, contrasted two sharply different approaches to internet services and hardware. Cisco, a company that makes 80 per cent of its revenues by supplying switches and routers, the hardware that forms the backbone of the internet, prides itself on operating entirely on open industry stands.
Speaking on the group's push into the home-technology market, Charlie Giancarlo, Cisco’s chief development officer, told The Times last week: "One advantage we have is that we work entirely through standards. We have been a company that has enabled interoperability between vendors, which is something sorely lacking in the consumer space, and something that we can start to make inroads on."
Apple, in contrast, has fiercely guarded the closed link between iTunes, which accounts for as much as 80 per cent of the download market in some territories, and its dominant iPod music players. Music and videos downloaded from iTunes, Apple's online store, work only with iPods.
Sitting in McCarran airport on Wednesday, ready to leave Las Vegas, Mr Giancarlo admitted to an "extraordinary" past couple of days. Not only had he just negotiated the Consumer Electronics Show (CES), the world's largest technology festival. As president of Linksys, the Cisco division that owns the "iPhone" brand, he had been made point man in a fight over the hottest trademark in the world.
Just hours earlier, Silicon Valley's largest company had lodged a lawsuit against Apple. The previous day, the iPod maker had promised to revolutionise the mobile market with another "iPhone". As Steve Jobs, Apple's chief executive, uttered the name, people wondered how he had persuaded Cisco to part with, or share, the moniker. Cisco has owned the brand since 2000 and used it for a range of internet telephones launched by Linksys just three weeks ago.
The answer, Mr Giancarlo quickly made clear, was that Mr Jobs hadn't.
It is hard to picture Mr Giancarlo relishing the prospect of eyeballing the Apple boss. In an industry characterised by hard-boiled negotiators, the Cisco man stands out as a picture of trim, considered politeness.
"We are not short of money. We have only ever taken one legal action before," he said. That suit, against Huawei, was settled in 2004 after the Chinese company agreed to change details of products Cisco alleged were copied illegally.
For its part, Apple claims that several companies have used the iPhone name, but only it has attached the tag to a mobile handset. This time, however, the group, which is also involved in investigations over the alleged backdating of stock options, may have picked the wrong fight. Cisco has just begun to take branding seriously as it moves in on consumers.
Speaking on Tuesday, the eve of Apple's iPhone event, Mr Giancarlo explained how Apple had made several rebuffed approaches to buy "iPhone".
He recounted how his mother once phoned to tell him how she had seen a Cisco truck driving by. After insisting that Cisco has no trucks, Mr Giancarlo realised she was talking about Sysco - the US bulk foods group. "People know about Cisco, perhaps because of the stock, but most people do not know what Cisco does," he said.
The group is intent on changing that. This year was the first in six that Cisco sent a significant presence to the CES, where its chief executive, John Chambers, gave a keynote speech highlighting the growing importance of consumer end users - a group he called "the human network".
Last year it paid $6.9 billion for Scientific Atlanta, a set-top box maker that has sold 50 million units into consumers' living rooms, a company Mr Giancarlo now runs.
Signalling how seriously Cisco now takes naming rights, it also recently paid $120 million to have the ground where the Oakland Athletics play baseball renamed "Cisco Field". It will make the site the "world's most technologically sophisticated baseball park" - a showcase for the next generation of networked technologies it intends to bring to people's homes.
In this mix, Cisco describes its iPhone's potential as "limitless", as home phones, mobile handsets and PCs converge over the web. However, Mr Giancarlo is most bullish on internet video, a market Cisco claims will be worth as much as $20 billion - before you factor in the network upgrade necessary to deal with surging traffic volumes. "A video is 10,000 e-mails, or 1,000 telephone calls," he said. Citing the success of sites such as YouTube, Cisco has predicted that 20 homes will generate as much network traffic by 2010 as the entire internet did in 1995.
To exploit this, Mr Giancarlo says that Cisco will concentrate on building partnerships with service providers, media groups and online vendors - a strategy that will rest squarely on open standards. Whether Cisco will be able to forge a truce with Apple is another matter. But Mr Giancarlo did argue that Cisco's claim to the contentious "i" prefix is as strong as anybody's.
"John Chamber [the Cisco CEO] gave a keynote at CES in 2000, which turned out to be prophetic," he says. "It looked at how the network was going to make a difference. It has; now everything is i-this, i-that."
