Apple announces the suspension of sales for its Series 9 and Ultra 2 smartwatches in the US.
The decision comes as a result of a patent lawsuit regarding the devices’ blood oxygen functionality.
The US International Trade Commission (ITC) previously ruled that Apple Watches infringed on the patent rights of medical technology company Masimo.
President Biden is reviewing the verdict until December 25, after which the prohibition may take effect if not vetoed.
Sales Suspension and Impact:
Apple to suspend sales of Series 9 and Ultra 2 from its website on December 21 and from retail stores on December 24.
The sales suspension does not affect other watch models without the blood oxygen sensor.
The impact on Apple’s sales will be felt in January and February, traditionally weaker months.
Apple has sufficient inventory of Apple Watch SE and other models to meet customer demand during this period.
Legal and Technological Alternatives:
Apple believes the ITC’s finding was erroneous and plans to appeal the decision to the Federal Circuit.
Masimo has accused Apple of stealing its pulse oximetry technology and has filed a lawsuit for patent infringement.
Apple is exploring legal alternatives and working on a workaround to bring the prohibited models back on the market.
If the ban is upheld, Apple may need to reach a settlement with Masimo or develop a new solution for the blood oxygen sensor technology.
Global Market Share and Regional Sales:
Apple holds approximately 25% of the worldwide smartwatch market.
During the Christmas sales season in the US and Europe, Apple’s market share typically exceeds one-third in the fourth quarter.
The sales prohibition only applies to the US market, and Series 9 and Ultra 2 will continue to be sold in other regions.
Asian sales during the Lunar New Year holiday will not be affected.
Conclusion:
The sales suspension of Series 9 and Ultra 2 smartwatches in the US poses a potential impact on Apple’s revenue in the upcoming months.
Apple is appealing the ITC ruling, exploring legal alternatives, and working on a workaround to address the patent infringement claims.
The overall impact will depend on the duration of the ban, the resolution of the lawsuit, and Apple’s ability to introduce alternative solutions or settle with Masimo.
