A patent infringement case is causing Apple to abruptly stop selling its two most recent Apple Watch models, the Series 9 and Ultra 2. Its website froze sales as of December 21st, and they’re set to disappear from physical Apple Store shelves after December 24th. The move came in response to an import ban handed down by the US International Trade Commission, which ruled in October that Apple infringed on patents made by Masimo’s pulse oximeter. That technology uses light to read blood-oxygen levels. Apple introduced a pulse oximeter feature utilizing that method in 2020 in its Apple Watch Series 6 lineup.
This means Apple can no longer import and sell its newest Apple Watch models in the US — at least for the time being. The company is already trying to come up with a solution to avoid the ban, but it might take a while until the dispute is completely resolved.
What models will now be unavailable?
According to CNN, Apple has stated that it will no longer sell its Apple Watch Series 9 and Apple Watch Ultra 2 in the United States, as of last week on Apple.com and from retail locations after December 24.
Other models will remain available for purchase for now, but if an import ban is approved, other versions will be hard to come by, too. This would include the Apple Watch Series 6 and later, and all models of Apple Watch Ultra. A ban will not impact sales of the Apple Watch SE, according to Apple. Some retailers, including Best Buy, which has stated that it still has plans to sell the devices.
If the order stands, Apple said it will “continue to take all measures” to make it available for customers “as soon as possible.”
What is the root of the problem?
Apple’s decision to take one of its most popular products off the shelf follows an ongoing dispute with Masimo over its blood oxygen feature. Apple has routinely marketed its smartwatch as a life-saving device, which has helped make the Apple Watch the most popular watch sold around the world, but its skirmish with Masimo threatens to undermine that.
Nearly two months ago, the ITC found several Apple Watches infringed on Masimo’s pulse oximeter patents, sparking a review period that would allow Apple to make a licensing deal with Masimo or appeal to veto the ban.
According to CNN, Masimo CEO Joe Kiani has stated that Apple has not approached the company for a licensing agreement or a settlement but that he is open to both.
Meanwhile, Apple said it firmly believes the ITC’s findings are inaccurate and should be reversed. It also plans to take the decision to the Federal Circuit. In addition, Apple said it has submitted evidence demonstrating how a ban would negatively impact healthcare, scientific and medical research, and Apple Watch users who rely on the ECG, blood oxygen and other health-related features. Pulse oximeters can be particularly helpful for people with various health conditions, including asthma, lung cancer and heart failure.
Kiani said he believes the decision to halt the sale of the devices is the latest salvo in the ongoing patent fight. Masimo has also argued in court that Apple poached more than two dozen of its employees before launching its W1 medical smartwatch in May 2022.
The entanglement further intensified last year when the Apple Watch maker filed two patent infringement lawsuits against Masimo, claiming the company copied patented Apple Watch features for its W1 device.
Why is President Biden involved?
President Biden has 60 days to review the ITC’s ruling before a ban could go into effect. It’s not the first time a president has had to step in over a patent issue involving Apple.
In 2013, President Obama vetoed an ITC ruling to ban older iPhones and iPads after it determined Apple was in violation of one of Samsung’s patents. It was the first time the administration had overturned an ITC ban in more than 25 years, according to the New York Times.
Does this matter to Apple?
According to Jitesh Ubrani, a research manager at market research firm IDC, Apple’s reputation is on the line. “It’s not a good look,” he said. “There may be an impact on sales in the first quarter of next year, but at the end of the day, no one wants to be caught infringing on patents.”
He said Apple’s decision to remove the devices before the end of the review period aims to “put them in a better light.”
“It shows they want to comply with the law the best they can while still being fiscally responsible,” Ubrani added.
As for sales, David McQueen, a director at ABI Research, said the decision to leave the watches available for purchase in stores until December 24 should help soften the financial impact of the blow of the move, giving shoppers a few days left to buy the devices ahead of Christmas.
“While Apple is the lead player in the sector with around a 24% market share, it may not actually affect its business too much if it can boost sales in these final few days, assuming there is available stock,” he said. “It may be able to ride out the holiday season without too much of an impact on sales.”
Apple sold 49 million smartwatches in 2022 and about 26.7 million in the first 9 months of 2023.
“It will be interesting to see how long the dispute will last, or when Apple opens its wallet, and when the ban will be lifted,” he added.
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