Apple is a great company and makes great products. This article was written on an Apple iMac. I use my Apple watch daily to monitor my exercise, schedule, health and many other aspects of my life.
However, for over three years now, Apple has been entrenched in a messy legal battle over a single feature on the Apple watch, the oxygen sensor. The Apple Watch Series 6 was the first Apple Watch with an oxygen sensor. Medical device maker Masimo filed a trademark complaint with the International Trade Commission against Apple for infringing its oxygen-sensor patents. The ITC ruled recently that Apple's watch infringed on Masimo's patents and imposed a U.S. import ban that went into effect on December 26, 2023, on the Apple Watch Series 9 and Apple Watch Ultra 2. T. Apple filed an appeal and won a temporary pause on the ban. Apple can resume selling both watches in the interim, but the litigation continues.
Massimo Corporation
Masimo Corporation is a health technology and consumer electronics company based in Irvine, California. The company primarily manufactures patient-monitoring devices and technologies, including non-invasive sensors using optical technology, patient management and telehealth platforms. In 2022, the company expanded into home audio by acquiring Sound United and began to manufacture health-oriented wearable devices. Sound United owns premium audio brands including Bowers & Wilkins, Denon, Marantz, Definitive Technology, Polk Audio, Classe' and Boston Acoustics. Masimo stated that the acquisition gave it access to more retail channels and product engineers. Further Masimo planned to leverage Denon's network-connected speakers as smart home hubs for aggregating health data from its services and devices. Also in 2022, Masimo released the W1, a smartwatch that included continuous health-monitoring features and integrated this with Masimo's other product lines. It was released in a limited public launch in the U.S., and to telehealth providers internationally. Masimo's market capitalization is $5.8 billion. Apple's market cap is $2.8 trillion, the largest corporation in the world. Apple is 48 times larger than Masimo. If Apple were to merge with Masimo, Masimo's lawsuit would go away, and Apple would be acquiring excellent technology and U.S. manufacturing capacity.
Apple Should Manufacture More in the United States
The Apple Watch alone generated about $17 billion in revenue last year, three times the value of Masimo. If Apple manufactured the watch and its components in the US, the International Trade Commission would not have the authority to impose a ban on Apple watch sales. In contrast to Apple's watch, Masimo builds its smartwatch in the U.S.
According to the Wall Street Journal, "Of Apple's more than 180 suppliers, 48 had manufacturing sites in the U.S. as of September 2021, up from 25 a year earlier, according to a supplier list released by Apple. More than 30 sites were in California, compared with fewer than 10 a year earlier. Many major suppliers such as chip makers Qualcomm and Taiwan Semiconductor Co., product assembler Foxconn and image sensor maker Sony added production sites in the U.S."
According to the New York Times, "Western companies doing business in China are facing pressures that were unimaginable several years ago. The country's economy is floundering, and its relationship with the United States is strained. Three years of border restrictions and an effective commercial lockdown have opened cracks that have yet to heal." Apple assembles its watches in China. The New York Times added, "The list of worries is long. Police raids on Western companies, steep fines, scuttled deals, regulations restricting data transfers and a wide-ranging counterespionage law have increased the costs of doing business." For example, the Chinese government banned iPhones for employees at government agencies and other state-controlled entities. This ban sent Apple's stock sliding six percent, erasing nearly $200 billion from its market value.Apple manufacturers only its MacPro high-end computer in its plant in Austin, Texas. At another plant in Sherman, Texas, 60 miles north of Dallas, Apple manufactures optical technology used for the iPhone. If Apple manufactured its watch in the United States, it would protect Apple from intervention by the International Trade Commission and free it of Chinese constraints. This would also free Apple from the regulations and pressure that the Chinese government puts on American companies.
