Apple’s flagship offerings, the Apple Watch Series 9 and Apple Watch Ultra 2, have ceased sales within the United States, a development not rooted in product discontinuation but rather a ban imposed by the United States International Trade Commission (ITC). This prohibition has struck a severe blow to the Cupertino-based tech giant’s lineup.
The Patent Infringement Saga Unfolds
The ITC’s decision stems from an ongoing patent infringement case initiated by medical device manufacturer Masimo. At the heart of the matter lies the alleged unauthorized implementation of Blood Oxygen technology in certain products manufactured by Tim Cook’s company. Despite Apple’s attempts to circumvent the ban, their efforts proved unsuccessful.
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Holiday Season Blues
The timing of this ban during the festive holiday season adds further weight to the predicament. Apple halted the sales of both Apple Watch Series 9 and Apple Watch Ultra 2 on its website on December 21 and removed these devices from stores on December 24 in the US, just before the ITC’s directive came into effect.
Amidst these developments, Apple has been fervently striving to address the issue through various strategies. Bloomberg reports that Apple engineers worked tirelessly on software alterations. However, Masimo contends that the fundamental hardware requires modification, asserting that any system-level changes would fall short of rectifying the problem.
Legal Battles and Financial Implications
Apple made efforts to delay the ban via a motion, but it was rejected last Wednesday. Despite the possibility for President Joe Biden’s administration to overturn the ITC ruling until December 24 (echoing a 2013 decision by Barack Obama to veto a ban on certain iPhones and iPads in a legal skirmish with Samsung), they opted not to intervene, maintaining a hands-off approach.
Apple’s response to the ITC’s ruling has been an appeal. In their legal filing today, the tech giant expressed concerns about the potential “irreparable harm” should the ban persist throughout the judicial process. While Apple refrains from citing specific figures, analyst Dan Ives of Wedbush Securities estimates that the holiday season alone could cost Apple between $300 and $400 million due to the smartwatch ban.
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Ripple Effects and Customs Dilemma
Beyond affecting sales, the ITC’s measure also impacts the importation of these devices. Third-party retailers, alongside Apple, face repercussions as they can still vend the prohibited watches but risk inventory depletion without the ability to replenish stock unless new devices can be imported into the country. The Customs Office is slated to weigh in on this matter on January 13, 2024, leaving the industry in a state of anticipation.
