Apple has announced a temporary halt in the sales of its Series 9 and Ultra 2 smartwatches in the United States, starting this week. This decision is a response to an ongoing patent dispute related to the technology supporting the blood oxygen feature on these devices.
The pause in sales follows a directive from the U.S. International Trade Commission (ITC) in October, which could potentially restrict Apple from importing Apple Watches due to alleged violations of medical technology company Masimo’s (MASI.O) patent rights. The decision is currently under review by President Joe Biden until December 25, with a potential ban effective from December 26 if not vetoed.
To comply with the ruling, Apple plans to temporarily stop selling the affected smartwatches on its website from December 21 and in Apple retail stores after December 24. Other models, such as the Apple Watch SE without the blood oxygen sensor, remain unaffected.
Ryan Reith from research firm IDC anticipates that the impact on Apple Watch holiday sales will be minimal, with the full consequences likely felt in January and February. Apple is well-prepared with sufficient inventory of Watch 8 and SE models.
Masimo CEO Joe Kiani expressed openness to negotiating with Apple, emphasizing the importance of respecting intellectual property rights. Apple, which commands about a quarter of the global smartwatch market, intends to appeal the ITC’s decision to the Federal Circuit, asserting that the finding was erroneous.
Masimo has accused Apple of employee poaching and incorporating its pulse oximetry technology into the Apple Watch. Legal actions between the two companies include a mistrial in a California federal court in May, with Apple counter-suing Masimo for patent infringement.
Despite the setback, Apple is proactively exploring legal and technical options, including adjusting algorithms in the smartwatches. The company aims to submit a workaround to the U.S. customs agency and is preparing stores for changes, signaling a commitment to ensuring the availability of Apple Watches.
The last veto of an ITC ruling occurred in 2013 during President Barack Obama’s administration. Apple’s wearables, home, and accessory business, responsible for products like the Apple Watch and AirPods, generated $8.28 billion in revenue during the third quarter of 2023, according to the company’s report.
