Apple to Halt US Sales of Series 9, Ultra 2 Smartwatches Amid Patent Dispute

Highlights

• Apple is halting US sales of its Series 9 and Ultra 2 smartwatches due to a patent dispute over the blood oxygen feature.
• The US International Trade Commission (ITC) ordered a potential import ban after finding Apple violated Masimo’s patent rights.
• The ban is under review by President Joe Biden until December 25, with potential implementation on December 26 if not vetoed.
• Apple plans to comply with the ruling, pausing sales on its website from December 21 and in retail locations after December 24.
• Models without the blood oxygen sensor, like the Apple Watch SE, remain unaffected.
• Apple is appealing the ITC’s finding, citing its erroneous nature, and is actively working on technical and legal solutions.
• The impact on holiday sales is expected to be minimal, with potential consequences in January and February.
• Masimo’s CEO expressed openness to negotiation, emphasizing the importance of intellectual property rights.
• Apple is preparing stores for potential changes and submitting workarounds to the US customs agency for approval.
  A veto from the Biden administration could prevent the ban, and Apple is taking measures to ensure watch availability to customers.
• Apple’s wearables, home, and accessory business, including the Apple Watch, generated $8.28 billion in revenue during Q3 2023.

Apple announced a pause in the US sales of its Series 9 and Ultra 2 smartwatches starting this week due to a patent dispute concerning the blood oxygen feature. The US International Trade Commission (ITC) ordered a potential import ban on Apple Watches in October, citing violations of medical technology company Masimo’s patent rights. The decision is under review by President Joe Biden until December 25, and if not vetoed, the ban would take effect on December 26.

Apple intends to comply with the ruling and will pause sales of the affected watches on its website from December 21 and in retail locations after December 24. Other models without the blood oxygen sensor, such as the Apple Watch SE, remain unaffected.

The ITC’s finding is being appealed by Apple, which believes it to be erroneous. Masimo’s CEO, Joe Kiani, expressed openness to negotiation in October, emphasizing the importance of respecting intellectual property rights.

The potential impact on Apple’s holiday sales is expected to be minimal, with the full consequences likely felt in January and February. The ban, if upheld, may affect Apple’s use of the disputed blood oxygen sensor technology in future devices.

While Masimo asserts that Apple needs to change the hardware, Apple is reportedly working on technical solutions and legal strategies, preparing stores for potential changes, and submitting workarounds to the US customs agency for approval.

A veto from the Biden administration could prevent the ban, but Apple is actively taking measures to ensure the availability of its watches to customers. Apple’s wearables, home, and accessory business, including the Apple Watch, generated $8.28 billion in revenue during Q3 2023.