Engadget posts the following:
We're not quite sure what broke down in talks between Cisco and Apple, but they ain't playing friendly no more. Cisco just announced that it has filed a lawsuit in Northern California to prevent Apple from infringing upon its registered iPhone trademark. The word yesterday was that Apple and Cisco had been involved in "extensive discussions," and that they were expecting Apple to sign up for whatever final agreement they proposed. "Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco's iPhone name," says Mark Chandler of Cisco. "There is no doubt that Apple's new phone is very exciting, but they should not be using our trademark without our permission."
Cisco sues Apple for trademark infringement: ruh roh! - Engadget
When I started the post, I hadn't seen Aaron's. But I believe that they both add to the story.