Apple is set to discontinue sales of the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States, starting this week on their website and after December 24 in stores.
This decision is a result of an escalating patent conflict with Masimo, a medical device company, over the blood oxygen monitoring feature in these watches. The feature has been crucial in promoting the Apple Watch as a life-saving device, contributing significantly to its status as the world’s best-selling watch. However, this legal battle with Masimo poses a potential risk to its market dominance.
Attention: In a significant development, the US International Trade Commission ruled against Apple for infringing Masimo’s pulse oximeter patent, leading to a potential ban on certain Apple Watch models.
Interest: President Biden is reviewing the decision, with a deadline for finalizing any potential ban. In anticipation, Apple has already stopped selling its Apple Watch Series 9 and Ultra 2.
Desire: Despite the impending ban, Apple remains defiant, actively seeking legal solutions to keep these popular models available to consumers.
Action: The ban, if confirmed, will impact Apple Watch Series 6 and later, including all Ultra models. However, the Apple Watch SE is not affected. The Series 9, launched with advanced features like hand gesture control, showcases Apple’s innovative edge.
An Ongoing Conflict
Apple disagrees with the ITC’s decision regarding their patent infringement and is planning to appeal to the Federal Circuit.
The company argues that a ban on their products would adversely affect healthcare, scientific research, and users who depend on health-related features like ECG and blood oxygen monitoring in the Apple Watch. Apple emphasizes the significant negative impact such a ban would have.
Masimo’s CEO Joe Kiani views Apple’s decision to stop selling certain Apple Watch models as part of the ongoing patent dispute, labeling it as deliberate infringement and a pressure tactic on President Biden.
Apple has not sought to settle with Masimo, but Kiani is open to it. The rivalry between the two companies intensified in October 2022 when Apple accused Masimo of copying features from the Apple Watch into Masimo’s W1 medical smartwatch, leading to Apple filing patent infringement lawsuits against Masimo.
Effect on Sales
David McQueen from ABI Research suggests that allowing Apple Watch sales in stores until December 24 could minimize the financial impact of the sales halt, offering a last-minute buying opportunity before Christmas.
Despite Apple leading the smartwatch market with a 24% share, McQueen believes this strategy, coupled with existing stock, might mitigate sales loss during the holiday season. Apple’s strong sales figures in 2022 and 2023 could cushion the impact. The duration of the dispute and Apple’s response will be key factors in the outcome.
Apple’s smartwatch sales reached 49 million units in 2022 and approximately 26.7 million in the first nine months of 2023. The ongoing dispute’s duration and Apple’s potential financial response are points of interest, particularly regarding the lifting of the sales ban. The impact on Apple’s business and market position will be significant to observe.