In a significant development, Apple (NASDAQ:AAPL) has announced the discontinuation of sales for its Apple Watch Series 9 and Ultra 2 models in the United States, starting December 21 online and December 24 in physical stores. This decision, reported by 9to5Mac and confirmed by TechCrunch, arises from a patent dispute with medical technology firm Masimo (NASDAQ:MASI). over the blood oxygen sensor technology used in these models. The International Trade Commission (ITC) ruled in favor of Masimo in October, leading to a presidential review period expiring on December 25. Apple’s decision to halt sales is a proactive measure in anticipation of the final outcome of this review.
This halt in sales is particularly impactful for Apple, as the iPhone and Apple Watch are major revenue generators for the tech giant. The timing coincides with the busiest quarter of the year, posing a significant challenge for Apple. Notably, the Apple Watch SE, which lacks the blood oxygen sensor, is unaffected by this decision. Apple has expressed disagreement with the ITC’s ruling and is exploring legal and technical avenues to ensure the availability of the affected Apple Watch models. They plan to appeal the decision, which they consider erroneous.
Market Overview: -Apple faces a last-minute Christmas crunch as it halts sales of its newest Apple Watch models, Series 9 and Ultra 2, in the US. -A patent dispute regarding the blood oxygen sensor technology, won by medical tech firm Masimo, forces the preemptive move. -The decision, effective December 21st online and December 24th in stores, throws a wrench into Apple’s busiest quarter. -While iPhone sales remain unaffected, the impact on Apple Watch, a key revenue driver, could dampen holiday cheer.
Key Points: -The International Trade Commission (ITC) ruling in October favors Masimo, prompting Apple’s precautionary action before the presidential review period expires on December 25th. -The lower-end Watch SE, lacking the disputed sensor, escapes the sales freeze, offering a potential alternative for gift-givers. -Apple vehemently disagrees with the ITC’s decision and plans to appeal, potentially opening up a protracted legal battle. -The company assures existing customers of efforts to resume availability of the Series 9 and Ultra 2 models as soon as possible.
Looking Ahead: -The outcome of the presidential review and ensuing legal battles will determine the long-term fate of the Apple Watch models in the US market. -Apple’s holiday sales figures will be closely watched for any significant impact from the disrupted Watch sales. -Investors will likely react to the situation, weighing the potential financial implications against Apple’s track record of navigating legal hurdles.
Apple’s response to the situation includes a commitment to work tirelessly to reintroduce the Apple Watch Series 9 and Ultra 2 to the U.S. market as soon as possible. In a statement, Apple highlighted their efforts in creating products with leading health, wellness, and safety features. The company also mentioned its previous legal actions against Masimo, alleging patent infringement by Masimo in their attempt to introduce a similar product.
