Feb. 22 (Bloomberg) -- Apple Inc. Chief Executive Officer Steve Jobs can start selling the iPhone in June as planned after agreeing to share the name with Cisco Systems Inc. and averting a possible court case.

The companies ended a six-week dispute by agreeing to share the iPhone brand and explore ways their products can work together, according to a joint statement late yesterday. Cisco sued Apple last month for violating a trademark owned since 2000.

The settlement paves the way for Cupertino, California-based Apple to start marketing the combination music player, mobile phone and messaging device, which was introduced to fanfare last month in San Francisco. Jobs expects to sell 10 million iPhones next year for as much as $599 a piece, taking on Research In Motion Ltd.'s BlackBerry and Palm Inc.'s Treo.

``This removes a distraction,'' said Bill Fearnley Jr., an analyst with FTN Midwest Securities Corp. in Boston. He rates Apple shares ``buy'' and doesn't own any. ``The iPhone is an exciting product that will help Apple extend the brand.''

Shares of Apple, which two weeks ago ended decades of litigation with the Beatles over rights to use the Apple name and logo, rose 31 cents to $89.51 at 4 p.m. New York time in Nasdaq Stock Market trading and have jumped 26 percent in the past year.

San Jose, California-based Cisco rose 2 cents to $27.40 and has gained 39 percent the past 12 months.

Worth More

Cisco, the world's largest maker of computer-networking equipment, claimed Apple's iPhone violated a trademark that Cisco acquired with the purchase of Infogear Technology Corp. Apple, which unveiled the device on Jan. 9, called the suit ``silly'' because its iPhone differs from Cisco's Web-based home phone.

``IPhone is worth a hell of a lot more to Apple than to Cisco,'' John Daniel, a partner at Kramer Levin Naftalis & Frankel LLP in New York, said before the announcement. He isn't involved in this case. ``The `I' prefix is what Apple has been developing, and if it didn't have that, it would be unhappy. I don't think anybody associates iPhone with Cisco these days.''

Apple approached Cisco about using the name several times in the past year and announced the product before an agreement was reached, according to a Jan. 10 blog posting by Cisco general counsel Mark Chandler.

Apple still faces possible delays in Canada, where closely held Comwave Telecom Inc. has used the iPhone brand since 2004 to sell Web-based phone service. Comwave said in January it filed documents opposing Apple's motion to take the name.

Coattail Effect

Cisco ``wants to ride Apple's brand recognition and get a little coattail effect,'' James M. McCarthy, a partner at McDonnell Boehnen Hulbert & Berghoff in Chicago, said before the announcement. He isn't involved in the case. ``Interoperability was important to Cisco.''

Cisco's iPhone is part of its Linksys home routing unit, which the company purchased in 2003 to tap the consumer market. The phones, which sell for less than $100, enable Web-based calls through EBay Inc.'s Skype service and Yahoo! Inc.'s Messenger.

The companies said yesterday that they will explore ways they can work together in security products as well as consumer and business communications.

For Apple, the decision follows an agreement with the Beatles to end all trademark disputes related to the ``Apple'' name and logo and may enable the company to add songs by the Beatles to the iTunes online store. Apple Inc. will license some rights back to Apple Corps Ltd.

The case is Cisco Systems Inc. v. Apple Inc., 07-198, U.S. District Court for the Northern District of California.

To contact the reporters on this story: Ari Levy in San Francisco at alevy5@bloomberg.net; Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

Last Updated: February 22, 2007 16:25 EST