The phones use the increasingly popular Voice over Internet Protocol, better known as VoIP, and also allow users to switch over for traditional landline calling.
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They also can search the Web and allow users to see when friends are online and ready to accept calls. Several other companies have similar offerings.
But the name has caused a stir.
Cisco has owned the trademark on the name "iPhone" since 2000, when it acquired the company that originally registered the name, InfoGear Technology Corp.
Industry watchers have speculated that Apple was close to releasing some kind of iPod and cellular telephone combination, possibly for unveiling at Macworld in January.
Until the Linksys announcement, the name "iPhone" was a logical guess.
Much of the speculation about Apple's activity centers on an application the Cupertino-based company filed with the U.S. Patent & Trademark Office for a "portable computing device capable of wireless communications."
The company has not discussed its plans, and declined Tuesday to comment on "rumors and speculation."
Analyst Tim Bajarin of Creative Strategies said a convenient naming option for Apple may have been eliminated, but the Linksys announcement will likely have little impact on Apple's plans.
Apple is believed to be working on a cell phone with music-playing ability, a markedly different technology than a VoIP phone, and still may have a surprise in store for the naming of any such device, he said.
"In our industry, naming the thing is almost as hard as creating the technology," he said. "It's pretty clear it's not going to be called 'iPhone.' But Apple's still pretty clever. They still could be very creative."