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Masimo CEO on Looming Apple Watch Ban: 'These Guys Have Been Caught With Their Hands in the Cookie Jar'

ArmCortexA8 said:
Masimo CEO abruptly quits - just in https://www.phonearena.com/news/CEO...-sales-and-features-resigns-abruptly_id163049 and Masimo investor relations confirms this: https://investor.masimo.com/news/ne...-Leadership-and-Business-Updates/default.aspx
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I'm guessing he overplayed his hand:

  1. Apple made a settlement offer.
  2. He felt they were lowballing him and waited for them to increase the offer.
  3. His bet: US Apple Watch customers were going to be annoyed enough to not have a feature for months and months that it would start making a dent into Apple's revenues.
  4. But… it didn't. In part because Apple Watch is, for Apple, a relatively minor business (wearables in total is 9% of revenues, and much of that is AirPods, and we're only talking US customers, and most Apple Watch functionality is fine). So Apple saw no point in increasing the offer.
As a result, instead of making pure profit from the settlement, he'd instead spent a lot of money on a continuing lawsuit. And the board didn't love that.
 
chucker23n1 said:
I'm guessing he overplayed his hand:

  1. Apple made a settlement offer.
  2. He felt they were lowballing him and waited for them to increase the offer.
  3. His bet: US Apple Watch customers were going to be annoyed enough to not have a feature for months and months that it would start making a dent into Apple's revenues.
  4. But… it didn't. In part because Apple Watch is, for Apple, a relatively minor business (wearables in total is 9% of revenues, and much of that is AirPods, and we're only talking US customers, and most Apple Watch functionality is fine). So Apple saw no point in increasing the offer.
As a result, instead of making pure profit from the settlement, he'd instead spent a lot of money on a continuing lawsuit. And the board didn't love that.
Click to expand...
Maybe, but Masimo did license their patents to Google and Qualcomm for an Android smartwatch, so why shouldn’t Apple agree to comparable terms?

Masimo has developed advanced medical technologies used in hospitals around the world. This is difficult and expensive to develop, and no, it isn’t Apple’s technology to pilfer and plunder as they see fit. Of course, none of us know what negotiations transpired and who refused the reasonable offer, but we can see that Google/Qualcomm agreed to terms with Masimo, so it appears that they can be reasoned with.
 
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Alameda said:
Of course, but it makes no sense to go through a patent lawsuit against Apple in order to get better terms than you got from Google/Qualcomm.
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Why not? Like you said, we don't actually know. But I see no reason to believe Apple didn't lowball them, and I also see no reason to believe the outgoing CEO tried to make a better deal than with Google/Qualcomm: he thought that he could, because Apple Watch is much bigger in terms of revenues than those companies' smart watches (or smart watch SoCs). Whereas Apple figured: our customers don't care about the feature that much.
 
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Alameda said:
Maybe, but Masimo did license their patents to Google and Qualcomm for an Android smartwatch, so why shouldn’t Apple agree to comparable terms?

Masimo has developed advanced medical technologies used in hospitals around the world. This is difficult and expensive to develop, and no, it isn’t Apple’s technology to pilfer and plunder as they see fit. Of course, none of us know what negotiations transpired and who refused the reasonable offer, but we can see that Google/Qualcomm agreed to terms with Masimo, so it appears that they can be reasoned with.
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A few possibilities.

1) Apple genuinely believes that ITC got it wrong when they ruled in Masimo's favour. It's not illegal to poach employees from another company and truth is Apple won on all but one count, meaning a lot of Masimo's patents ended up not really being relevant to the lawsuit. So Masimo is hardly the underdog in this story.

2) Apple realises that the ban will not have a material impact on Apple Watch sales at the end of the day. It affects only watches sold in the US, and I believe those patents will eventually expire anyways, and Apple is pretty good at playing the long game.

And Apple may not have been wrong. Nobody really talks about the blood oxygen sensor (or its lack thereof) these days, suggesting that consumers may not really care as much, or it simply isn't a dealbreaker when shopping for an apple watch.
 
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I had planned to upgrade my Gen. 1 SE to an Ultra 3 this year. Possibly as a Christmas present to myself. The lack of a (currently functioning) blood oxy sensor had no impact whatsoever on my plans.

I say this as somebody who checks and records his blood oxy every Monday morning. So it is something I track.

So, from my perspective: If Apple simply figured they could wait Masimo out on this issue because it wouldn't affect their sales much, if at all: They got it right.
 
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chucker23n1 said:
Why not? Like you said, we don't actually know. But I see no reason to believe Apple didn't lowball them, and I also see no reason to believe the outgoing CEO tried to make a better deal than with Google/Qualcomm: he thought that he could, because Apple Watch is much bigger in terms of revenues than those companies' smart watches (or smart watch SoCs). Whereas Apple figured: our customers don't care about the feature that much.
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It appears that his acquisition of Sound United, and resulting stock decline, was a much bigger factor than the Apple Watch situation.
 
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