Is Apple running a ruler over Masimo’s medical and software development business, with the possibility that the iPhone maker could move into the fast growing, medical monitoring market spanning both medical facilities and the home.
The move would give Apple access to a market that are now using smart watches and mobile devices to track patents while reducing costs for Governments funding health facilities.
In the USA Masimo is a fixture in both private and Government run medical facilities.
Its equipment for tracking blood oxygen, blood management and other measures is used on more than 200 million patients a year, the company says.
If a deal was done the former Sound United business now called Masimo consumer will most likely be sold off claim insiders.
Today Masimo has a market capitalisation of $US6 billion and annual revenue of about $US2 billion, Kiani says Masimo started as an underdog just like Apple.
During the past six months as Masimo battled Apple in US courts shares in the medical monitoring Company have fallen 27%.
A key outcome for Kiani would be a settlement or a buyout of Masimo by Apple, either way it would deliver a big payday and vindication.
Several observers have told ChannelNews that the health market is a “massive growth market that Apple needs to be in. Masimo has the technology and the distribution and an acquisition of Masimo would give the Company access to a market that is growing both at a consumer and B2b level. The marriage of watches and smartphones packed with medical technology is a logical extension for Apple”.
It also would give Masimo immediate access into a consumer market while delivering a B2b market for Apple.
Apple says it has held mediation talks with Masimo and that it expects to hold more in coming days.
According to insiders Masimo Chief Executive Officer Joe Kiani an Iranian immigrant, has spent millions of dollars fighting Apple over stolen blood oxygen technology.
Recently he had a major win in the US courts that resulted in Apple having to remove their latest watches using the Masio developed technology from stores in the USA.
ChannelNews understands that the US business is currently in talks with Apple with insiders telling ChannelNews that Apple could be interested in getting into the medical market and that Masimo would be an “ideal acquisition” as they already have products, technology patents and a distribution network.
Many companies have made arguments that Apple has stolen their technology and poached staff, putting them out of business or sending them into bankruptcy.
With Masimo it was a totally different story, with Kiani a hard-core businessman deciding to take on Apple in a case of “bugger the costs” as one executive said.
Apple came unstuck when they poached Marcelo Lamego a former senior Masimo R&D executive who has been accused of stealing Masimo’s patented technology.
Masimo claimed that the poaching of employees and the theft of their technology that Lamego had worked on infringed its patents.
Bloomberg claims that Lamego joined Masimo in 2003 as a research scientist before becoming Cercacor’s tech chief around 2006.
Cercacor was a spin-off of Masimo, and both companies are run by CEO Joe Kiani, who helped invent much of their core technology.
Lawyers for Masimo say that Lamego lacked prior knowledge about how to develop the blood-oxygen feature (his previous studies were about neural interfaces rather than health sensors).
He learned how to build the technology at Kiani’s companies and delivered it to Apple, they say.
When Apple initially approached Lamego he declined their offer, but his tune changed, and he started working for Apple after Kiani refused to make him the chief technology officer of Masimo partly because of his erratic management style and the fact that there were more experienced people available.
Apple then moved to hold a meeting with Masimo, at the time, Masimo believed Apple was interested in doing a deal.
the company alleged in a 2020 lawsuit that Apple used the meeting to instead learn about its technology and lay the groundwork for hiring its people.
In addition to enlisting Lamego, Apple hired Masimo’s former chief medical officer and about 20 other staffers, the medical device company said.
After he quit Apple, Lamego ended up starting his own company, True Wearables with a product similar to Masimo’s own measurement watch.
In 2016, he released a device called the Oxxiom, Masimo sued the start-up and won a court order blocking it from selling the product.
When Masimo filed its initial lawsuit, Apple hadn’t yet brought a blood-oxygen sensor to market. But eight months later, the Apple Watch Series 6 was introduced with the feature – known in the industry as pulse oximetry – as its key new addition claims Bloomberg.
That led Masimo to file a separate complaint with the US International Trade Commission in 2021 alleging that the feature infringed its patents.
The ITC concurred in October and ordered Apple to remove infringing models from the US, including the current Series 9 and Ultra 2.
Apple argues that Masimo sued it to clear the field for its own consumer-focused wearables.
Masimo recently released the W1, a square smartwatch with an array of health sensors, a new Masimo watch called the Freedom is set to be released in Australia this year according to sources.
This device is more consumer friendly, and has more health capabilities and a round, more modern-looking design.
Kiani said earlier this month that Apple should have done things differently.
“They didn’t have to steal our people — we could have worked with them,” he said. “These guys have been caught with their hands in the cookie jar, and — instead of being embarrassed and doing the right thing — they’re blaming everybody and fighting everybody.”
Kiani said that Apple executives once called him the “Steve Jobs of healthcare.” “Maybe it’s time they think different,” he said.
What is interesting is that Kiani is friends with US President Joe Biden, one person who could have stopped the Apple Watch sales ban but chose not to intervene.
In its earlier suit, which ended with a deadlocked jury, Initially Masimo wanted Apple to pay billion in damages.
Kiani isn’t saying how much money it would take to reach a deal with Apple.
But he does plan to insist on one concession: “There needs to be an apology.”
