Mark Chandler, general counsel at Cisco, wrote on the company's official blog that talks over the use of the iPhone brand failed because Cisco asked that the new handset work with its networking devices.
"What were the issues at the table that kept us from an agreement? Was it money? No. Was it a royalty on every Apple phone? No. Was it an exchange for Cisco products or services? No," Chandler said on the blog.
"Fundamentally we wanted an open approach. We hoped that our products could interoperate in the future."
Apple is well known for its view on using proprietary technologies; the company's iTunes software is only compatible with iPod media players, for example.
Cisco is suing Apple over its use of the iPhone name, which it claims it owns as part of its buyout of Infogear Technologies in 2000. Cisco has already released a VoIP phone using the iPhone name through its Linksys unit.
Apple chief executive Steve Jobs has also stated that Apple will not open up the iPhone to allow third-party developers to write software for the device.
"We define everything that is on the phone. You don't want your phone to be like a PC," Jobs told the New York Times.
"The last thing you want is to load three apps on your phone and then make a call and it doesn't work anymore. The iPhone is more like an iPod than a computer."
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