Masimo Corporation (MASI), a leader in non-invasive monitoring technology, launched its iSpO2 pulse oximeter cable and sensor with Measure-Through Motion and Low Perfusion Masimo SET technology for use with Apple’s (AAPL) iPhone, iPad or iPod touch with 30-pin connector. This marks the launch of Masimo’s first consumer product.
iSpO2 is built with the technology used in Masimo’s well-regarded line of pulse oximeters and Pulse CO-Oximeters. Masimo’s iSpO2 cable and monitor can be used on the iPhone, iPad or iPod touch to monitor blood oxygenation (SpO2), pulse rate and perfusion index measurements.
However, the technology is meant for sports and aviation use and is not for medical use because the iSpO2 Medical (the version intended for medical use) is awaiting European CE Mark approval as well as 510(k) clearance by the U.S. Food and Drug Administration (:FDA). Following the clearance, Masimo’s iSpO2 will be provided by the company’s distribution network.
We currently have a long-term ‘Neutral’ recommendation on the stock, which carries a short-term Zacks #3 Rank (Hold).
The company’s latest technology should beef up its client base which already includes hospitals and health systems with sizeable footfall across the U.S. Going forward, the higher adoption of the technology will act as a positive catalyst as Masimo’s clients continue to standardize their non-invasive monitoring technology.
Masimo estimated the global market size for pulse oximetry to be more than $1 billion in 2011. With growing barriers to entry in the non-invasive parameters' product market and widespread adoption of pulse oximetry in non-critical areas of the hospital care, Masimo should tap the opportunity to accelerate its top-line.
However, the company’s reliance on third-party providers like OEMs for a part of its business and customer concentration raises concern. Additionally, we remain concerned about Masimo’s reliance on group purchasing organizations for the sale of its pulse oximetry products to hospitals in the domestic market. We also note Covidien’s (COV) effort to expand its oximetry and monitoring products portfolio.
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