In the midst of an ongoing legal battle with medical technology company Masimo, Apple is grappling with decisions surrounding the future of its Series 9 and Ultra 2 Apple Watches in light of a recent ban imposed by the US Court of Appeals for the Federal Circuit.
According to Reuters, Ben Bajarin, Chief Executive of analyst firm Creative Strategies, anticipated that Apple will likely choose to disable the blood oxygen features on the affected Apple Watch models rather than cease sales. This strategic move aims to maintain the availability of the watches in the market, even as legal proceedings unfold.
While the ban’s impact is confined to the United States, Apple’s overall revenue dynamics come into play. Approximately 42 per cent of the tech giant’s revenue last year originated from North America, where the legal restrictions are in effect.
The Apple Watch, though smaller in sales compared to the flagship iPhone, holds significant weight in Apple’s wearables sales segment. In fiscal 2023, wearables, including the Apple Watch, AirPods, and other products, contributed a notable US$39.84 billion to Apple’s overall revenue of US$383.29 billion.
The legal saga initiated when Masimo accused Apple of poaching its employees and stealing pulse oximetry technology for use in Apple Watches. The US International Trade Commission (ITC) responded by imposing an import ban on Series 9 and Ultra 2 Apple Watches, prohibiting direct Apple sales following Masimo’s complaint.
The ITC’s import ban briefly went into effect on December 26, but the Federal Circuit lifted it on December 27, considering Apple’s request for a long-term pause. Apple resumed sales later that day. Masimo alleged that Apple’s actions aim to pave the way for its competing watch.
Apple, in response, ceased sales of its latest Series 9 and Ultra 2 watches in the US before Christmas, awaiting the Federal Circuit’s decision. During this period, the devices remained available through other US retailers such as Amazon.com, Best Buy, Costco, and Walmart.
Apple is now seeking a prolonged pause on the ban throughout the appeals process, which is anticipated to span several months. The company argues that the ban would adversely affect not only Apple but also its suppliers and the public. The commission counters that Apple’s arguments amount to a request for permission to continue patent infringement.
