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Comment by jusonchan81 | Hacker News Reader

Is there a chance Apple will pay Masimo for the technology and resume sales?

I am curious why that didn’t happen. If this is an exec’s decision and this leads to bigger losses than paying Masimo, I wonder what would happen the people involved in the decisions.

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There's a chance. This is likely Apple exhausting options before it settles into a licensing deal. First you try cease-and-desist, then appeals, then settlement, then import restriction negotiation, etc. Obviously Apple does not want to pay a fee per watch for the technology. They say they're going to try to fix it in software, Masimo says it's a hardware thing.

Apparently this whole thing happened because Masimo started selling a watch and Apple brought a suit against it and the ruling didn't go their way.

It's also happening because after some failed negotiations Apple just straight up started poaching employee talent from Massimo.

This is a good thing. It increases salaries for everyone. If Apple can make more money with your ideas than Massimo, why shouldn't they be allowed to pay you more?

Masimo made investments into R&D. They payed salaries to researchers to create new products and got awarded a patent for that investment. If the employees knew they were onto something big, they should've started a company or negotiated higher salaries before the patent was filed. If you want the reward, you have to take the risk.

Apple sits on heaps of cash and could have done the same.

>It increases salaries for everyone.

Not always and not for everyone. Follow me: Currently there are two players in this space competing for talent, Apple and Massimo. This competition results in higher wages and more innovation. What do you think will happen to wages and innovation if Apple just guts Massimo(or any other company) and now there's only one player on the market, Apple? Now Apple can pay you whatever they want because you have nowhere else to go.

How do I know this? Because years and years ago, two major semiconductor companies had offices in my home town. And workers would get pay raises by jumping ship between the two. A few years ago, one of the bigger corps. bought the other smaller one becoming an even bigger behemoth, so the offices had to merge, leading to layoffs in the name of cutting the redundant jobs and "optimizing efficiency". What do you think happened to the wages at the new giant company? Did they go up or not?

So, I question the thought process of HNers who support that Apple crushing a smaller player out of a market somehow leads to higher salaries for everyone. If you want higher salaries, you need more players in that market, not one giant monopolist. This isn't Apple vs some equal Goliath like Google or Microsoft who can afford to fight fire with fire.

Hands down the worst take I've read here in a long time and there have been some doozies.

Aside from the detailed rebuttal someone already gave, can you explain in this world of higher salaries what incentive any company not named Apple/Google/Microsoft would have to bother doing R&D if the big boys can just come in and steal your IP and talent?

That' not the complete story. Apple basically screwed Massimo in getting Massimo to spill their guts on their sensor tech promising them an licesing/partnership and instead of following through, they decided to cease any licensing deal and instead poach the team to build that tech inhouse instead of licensing it.

It's known in SV as "brain fucking". A lot of big companies do this to small companies where they promise a acquisition/licensing/funding deal in order to get presentations with confidential info on the core tech, and then just use their massive war chest to build that core tech themselves without compensating the smaller player for having reveal the keys to the kingdom.

This seems like a huge problem for startups.

Like, the whole point of a startup is (often) to get bought by a big player.

But what if the big players learn all they can from due diligence presentations, then poach your tech and talent, and when you complain, it turns into a drawn-out court battle they win because they can afford $billions in legal fees but you can only afford $10's or $100's of millions?

Is there a counter? If there is no counter, why does VC exist at all? If the counter is "don't spill the beans to big companies looking to buy you out," how does any startup ever get acquired?

I believe the closest counter is a breakup fee. Not a perfect solve, though.

Apple learned the game from Microsoft, who probably learned from someone else. MS was famous for just stealing any technology they wanted.

Since most SV startups don't like to patent things (and very few do anything actually patentable), it works. When you run into a case like this, it makes it very hard to say that you didn't infringe their patents.

Where are you getting your information? Doesn’t pass the smell test. Apple does tons of licensing deals—how could you run a vertically integrated company like theirs otherwise? A quick Google search suggests the working environment at Masimo is quite poor, so it makes sense employees might leave.

Read it, don't smell it.

> then import restriction negotiation, etc

I don't think many of us have ever seen this step.

Is it worth the long term increase in cost if Apple pays Masimo? It's not a one off where you just pay up to continue operations. Pay one and many more will line up. I am sure Apple's analysts already have a number for how much profit they'd slough off if they pay off Masimo and many more follow.

> I am sure Apple's analysts already have a number for how much profit they'd slough off if they pay off Masimo

Apple famously does not budge on their margins. If forced to pay a license fee, prices on these models will absolutely go up. Sale stoppage + this news cycle allows them to reset pricing when they start up again, without making consumers too mad.

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