CES Day Two: iPhone Launch Creates a Deafening Buzz; Chambers Makes the Consumer-Enterprise Connection

• By John K. Waters
• January 10, 2007

It is no small irony that the biggest buzz on Tuesday at the world's biggest consumer electronics show was generated by a device unveiled at another event about 500 miles away. Apple Computer's long-rumored and much-anticipated iPhone, finally launched at the Macworld Conference and Expo in San Francisco, all but eclipsed the stunning array of mobile devices on display this week at CES—not to mention the big screen TVs, the smart-house systems, the digitally enhanced ATV, and just about everything else. For about a day, it was the talk of the conference.

Aaron and Susan, attendees from Boston, whom I found standing before LG Mobile's elegant display of its new Black Label Series of Chocolate phones, expressed what I suspect was the conference consensus. ''I can't believe we're not going to get to see an iPhone,'' Aaron told me. ''This is CES, for god's sake.'' Susan added the other most often heard comment (at least by me) on the new phone-video-music-player combo: ''I want one!'' There was in her eyes, I swear, the kind of lust and longing I associate with steamy romance novels.

On Tuesday, no one I spoke with as I wandered the various conference environs even suspected that there would be a legal controversy around the iPhone launch. Even the Cisco Systems execs gathered for a post-keynote press conference that day evinced a shoulder-shrugging nonchalance on the then-unofficial trademark dispute that would later dominate the headlines.

''As some of you may know, Cisco owns the iPhone trademark,'' the company's chief development officer, Charlie Giancarlo, told reporters, ''and has been using it since about 1996. As is fairly typical in situations like this, I have a statement that has been drafted for me, and this will be the total of what we will have to say on this topic... until we have more to say.''

(I have to note here that the mere mention of the iPhone drew cheers and applause from the reporters in attendance. Cynical, heard-it-all-before, oft-burned tech reporters were cheering the damned thing.)

The statement that followed: ''Given Apple's numerous requests for permission to use Cisco's iPhone trademark over the past several years and our extensive discussions with them recently, it's our belief that, with their announcement today, Apple intends to agree to the final document and public statement that were distributed to them last night, and that addressed a few remaining items in our discussions with them. We expect to receive a signed agreement today.''

As we now know, Apple decided not to sign, and Cisco reportedly plans to sue.

It's another little irony that one of the companies at the center of this consumer electronics controversy would give me the enterprise IT context I've been searching for since I arrived in Sin City. Cisco CEO John Chambers told his keynote audience earlier that the consumer market, which now constitutes about 10 percent of the company's business, is one of Cisco's top four ''focal points'' for the next decade. He outlined the San Jose, CA-based computer networking giant's plan to offer data, voice, video, and mobility to consumers by enabling the convergence of all those services on a variety of devices. The cornerstone of his company's consumer vision, he said, is an intelligent network, based on standards, that simplifies the complexity behind the services.

How, I have to ask, is that a ''consumer'' vision? Isn't that what enterprise software and hardware providers are striving for every single day? Isn't the need to manage complexity at least one of the driving forces behind the advent of virtualization? Doesn't the goal of linking everything while hiding the plumbing lie at the heart of service-orientation? Web services? Web 2.0?

That Cisco wants a bigger piece of the consumer pie is clear, and not surprising. The company's acquisition of consumer networking company Linksys in 2003 (which is where it snagged the iPhone trademark), was one naked nod to that market, among others. And Chambers' message on Tuesday was certainly tailored for a CES audience. But what I heard wasn't so much a declaration of intent to storm the consumer market, as a continuation of the company's broad, inclusive, ongoing network-centric IT strategy.

''The exact same concepts will start with the consumer, often with our kids, and absolutely come into business,'' Chambers said. ''While The first wave of Internet revolution was clearly driven from the enterprise down, you're now talking about the next wave literally being from the consumer to the entire environment.... People ask me, how does this tie into the business world, and how does the way we provide devices and capabilities and services to consumers translate at work? It's exactly the same architecture... Any device, any content, anywhere. The ability to collaborate [enabled by this architecture] will be next wave of business productivity enhancement going forward.''

The convergence isn't just among media and communications technologies, but the purposes of those technologies. The line between consumer and enterprise IT has long been a blurry one, and Chambers and company are in the process of erasing what remains of it.