CLA-2 OT:RR:CTF:TCM H167260 RM

Ali Kamara-Bunduka
Manager, Customs Brokerage
Kuehne & Nagel, Inc.
5353 W. Imperial Highway
Suite # 1000
Los Angeles, CA 90045

RE: Tariff Classification of the Jawbone® Jambox®

Dear Mr. Kamara-Bunduka:

This is in response to your electronic ruling request, submitted on January 28, 2011, to the National Commodity Specialists Division of U.S. Customs and Border Protection (“CBP”), regarding the classification of Jawbone’s® Jambox® under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your request was forwarded to this office for a response.

FACTS:



Jawbone proposes to import the Jambox, a Bluetooth-compliant wireless speaker with a built-in microphone. It is a portable device that connects to laptops, smart phones, tablets, and mp3 players through a 3.5mm stereo wire or wireless Bluetooth technology. It measures 151mm (length), 57mm (width), 40mm (height) and weighs 327 grams (12oz). The Jambox has a speaker output level of 85 decibels (at 0.5m) and a frequency response of 60Hz-20 kHz. When paired to a mobile telephone via Bluetooth, the Jambox will also function as a “speakerphone” – i.e., a device that enables its user to dial, answer calls, and talk hands-free by broadcasting the call. The Jambox is imported as it is sold at retail; that is, together with a 60-inch USB charging cable, a 12.5-inch micro USB charging cable, a 36-inch 3.5mm stereo cable, an A/C wall charger, a user guide, and a carrying case. Additional audio and dial applications and software updates can be downloaded onto the device via “MyTALK”, an online platform managed by Jawbone. It retails at $199.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.

The 2011 HTSUS provisions under consideration are the following:

8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:

***

Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network):

***

8517.60.00 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus …

* * *

8518 Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof:

*** Loudspeakers, whether or not mounted in their enclosures: ***

8518.22.00 Multiple loudspeakers, mounted in the same enclosure …

* * *

Note 3 to Section XVI, HTSUS, provides that:

Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.

The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

* * *

At the outset, we note that the Jambox is classified as a “set” pursuant to GRI 3(b) because it is imported packaged as sold at retail; that is, together with USB charging cables, a stereo cable, an A/C wall charger, a carrying case and a user’s guide. GRI 3(b) states that “[g]oods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character.” EN (X) to GRI 3(b) provides that “[f]or the purpose of this Rule, the term 'goods put up in sets for retail sale' shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings . . . ;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).”

At least two of the articles at issue here are prima facie classifiable in different headings of the HTSUS: the USB charging cables and the stereo cable in heading 8544, the A/C wall charger in heading 8504, the carrying case in heading 4202, and a user’s guide in heading 4901. Moreover, those articles are “put up together” to enable a user to use, carry and charge the Jambox, and are offered for sale directly to users without repacking. The item which imparts the essential character of this set is clearly the Jambox, as it is the dominant component, by use and cost in relation to the other constituent components of the set. It is also the reason why a consumer would purchase the set. As such, the set will be classified as if consisting only of the Jambox.

The Jambox is a machine designed for the purpose of performing two complementary functions described by Section XVI of the HTSUS: it amplifies sound (heading 8518) and it transmits and receives radio signals to and from a mobile phone to enable hands-free telephony (heading 8517). The product is not described in full by a single heading. Accordingly, pursuant to Note 3 to Section XVI, the article will be classified “… as if consisting only of that component or as being that machine which performs the principal function.” See Note 3 to Section XVI.

CBP has found the analysis developed and utilized by U.S. courts in relation to “principal use” (the “Carborundum factors”) to be a useful aid in determining principal function. Generally, the courts have provided several factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: (1) general physical characteristics, (2) expectation of the ultimate purchaser, (3) channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), (4) use in the same manner as merchandise which defines the class, (5) economic practicality of so using the import, and (6) recognition in the trade of this use. See Lennox Collections v. United States, 20 CIT 194, 196 (1996). See also United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976); Kraft, Inc. v. United States, 16 CIT 483, 489 (1992); and G. Heileman Brewing Co. v. United States, 14 CIT 614, 620 (1990).

General Physical Characteristics

The Jambox is shaped like a rectangle. It has a metal exterior casing with a rubber trim on the top and bottom. It houses two speakers, a microphone, and a Bluetooth-compliant transceiver. This hardware enables it to amplify sound and to communicate with a mobile telephone in order to manage telephone calls hands-free (i.e., to voice-dial, answer, and broadcast calls). Jawbone refers to the latter function as a “speakerphone” function. We note, however, that even though it is referred to as a “speakerphone”, it is clearly not the entire speakerphone – i.e., a telephone with a loudspeaker and a microphone – because it lacks the telephone. Moreover, the device is not always in speakerphone mode; that function is only activated if and when an inbound call is received or an outbound call is initiated. Any other time, the Jambox functions as a loudspeaker. As such, the device’s general physical characteristics indicate that is designed to function principally as a loudspeaker.

Recognition in the Trade of Use

Product reviews reveal that the Jambox is recognized by the electronics industry as a device that functions principally as a loudspeaker. Wired Magazine, for example, raves about the quality of the speakers, specifically “…the output and dynamic range pumping from this little 12-ouncer” yet it notes that “[the] speakerphone quality is average — i.e. you probably won’t use it (without annoying your caller).” Steven Leckart, Jawbone Creates a Wireless Speaker with Serious Boom, 11/04/2011, 2010, www.wired.com, accessed on 06/06/2011. Likewise, the CNET Editors Review describes the Jambox as “… a rechargeable Bluetooth speaker with advanced features, a stunning design and a balanced sound that defies its small, convenient size.” CNET goes on to say: … this little speaker bar uses two 1.25-inch drivers on the front and a passive radiator woofer on the back to deliver a surprisingly balanced sound for its size. Just as importantly, the Jambox includes an integrated microphone, capitalizing on Aliph's expertise in wireless voice communication. …

Incoming call quality was very good using an iPhone 4 as the paired device. Outgoing voice quality using the Jambox's integrated microphone was decent when placed within arm's reach, and free from the background hiss associated with cheap speakerphone units. [Emphasis added.]



Donald Bell, Jawbone Jambox, 11/16/2010, CNET.com (accessed on 06/06/2011).

MacWorld Magazine, which refers to the product as “a Bluetooth speaker”, adds that “[its] sound quality is excellent, particularly given its size. That so much oomph can come from such a tiny package is amazing. …” As for speakerphone audio quality, the reviewer notes that “… callers told me they knew that I was on a speakerphone, but they could hear me—and I them—just fine. I did have one complaint here, though: When using the Jambox as a speakerphone, I needed to increase the Jambox's volume level quite a bit, because callers consistently sounded much quieter than anything else I listened to ….” Lex Friedman, Aleph’s Jawbone Jambox, Macworld.com, 11/04/2010 (accessed on 06/06/2011). Engadget.com shares the same concerns with regard to its performance as a speakerphone, noting that “even with little to no noise in the background, folks kept us asking us to speak up. They complained that our volume was too low and our words often got cut off with the unit sitting on a nearby table ….” Sean Hollister, Jawbone Jambox Review, Endgaget.com, 12/03/2010 (accessed on 07/07/2011). These reviews reveal that the industry considers the Jambox to be a portable, Bluetooth-compliant loudspeaker. The speakerphone capability is regarded as a bonus or even optional feature. Accordingly, we find that these factors indicate that the device functions principally as a loudspeaker. Channels of Trade and Environment of Sale and Expectations of the Ultimate Purchaser

The Jambox is available for purchase from the manufacturer’s web page (www.jawbone.com), as well as several electronics retailers found on the Internet (for example, www.amazon.com, www.target.com, and www.bestbuy.com). Those retailers sell loudspeakers as well as devices which enable hands-free telephony when paired to a mobile telephone (e.g., Bluetooth headsets). The retailers’ websites list the good in a variety of categories, including “speaker”, “speaker/speakerphone”, “mobile phone adds-ons”, and even “toys”. As such, we find that channels in which this product is traded are not determinative of its principal function.

The Jambox is advertised as both a speaker and a speakerphone. Jawbone calls the Jambox “the smallest, best sounding wireless speaker and speakerphone on the planet.” Moreover, while most third-party retailers sell the product as a speaker, many call it a speaker/speakerphone. As such, we find that the manner in which it is advertised does not favor either function. For that reason, we find it reasonable to conclude that the purchaser of the Jambox would expect to use it as a loudspeaker and as a speakerphone.

Use and Economic Practicality of Use

Based on the above-quoted electronics industry assessments that the Jambox is an excellent loudspeaker but an average quality speakerphone, we find that it would be economically impractical to purchase the device primarily for its speakerphone functionality. Accordingly, this factor favors classification as a loudspeaker.

* * *

The Carborundum factors indicate that the Jambox functions principally as a loudspeaker. In particular, we refer to its general physical characteristics, the fact that industry considers this product to be a wireless loudspeaker with a subsidiary speakerphone function, and that it would be economically impractical to use it principally for its speakerphone functionality. Therefore, applying Note 3 to Section XVI, HTSUS, which directs us to classify a multi-function machine as if consisting only of that component which performs the principal function, we conclude that the Jambox is classified under heading 8518, HTSUS, as a loudspeaker.

HOLDING:

By application of GRI 1 (Note 3 to Section XVI) and GRI 3(b), the Jambox is classified under heading 8518, HTSUS, specifically in subheading 8518.22.00 which provides in pertinent part for: “Loudspeakers, whether or not mounted in their enclosures; …: Loudspeakers, whether or not mounted in their enclosures: Multiple loudspeakers, mounted in the same enclosure.” The column one, general rate of duty under the 2011 HTSUS is: 4.9 % ad valorem.

Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov/tata/hts/.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.

Sincerely,

Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch