Apple officially halted sales of its latest smartwatch models, Apple Watch 9 and Apple Watch Ultra 2, through its website on Thursday. This action comes in response to the recent ruling by the U.S. International Trade Commission (ITC) in the lawsuit filed against Apple by medical technology manufacturer Masimo.
The company announced that it would cease sales of these flagship smartwatch editions on its website in the U.S. starting Thursday, and in retail stores ahead of Christmas Eve (December 24). Apple’s request to suspend the implementation of the ban until the appeal on Masimo’s lawsuit is reviewed was denied by the U.S. committee. However, order fulfillment will continue on their website until December 24.
Apple filed an appeal in October, which is yet to be decided, leaving the only hope for the iPhone manufacturer in a direct intervention by U.S. President Joe Biden to halt the ban. The window for this intervention remains open until December 25.
According to Bloomberg, the White House announced on Tuesday that it closely monitors the developments related to the ITC’s judicial decision regarding the ban on the sale and trade of Apple’s smartwatches.
Masimo filed the lawsuit against Apple, accusing it of exploiting its patents to develop the technology behind the blood oxygen level sensor. This sensor was introduced by Apple in its smartwatch lineup, starting from Apple Watch 6 and the latest editions. However, the ban will only apply to Apple Watch 9 and Apple Watch Ultra 2.
Apple faces allegations from Masimo that it actively pursued nearly 20 employees from the medical technology company by increasing their salaries, sometimes doubling them. This was allegedly done to form a core development team for many features offered across its smartwatch family, some of which allegedly violate Masimo’s patented technologies, as reported by Reuters in October.
Financial analysts at J.P. Morgan estimate that the sales ban of Apple Watch is expected to impact the company’s annual revenues by approximately 1%, equating to around $5 billion. Apple’s financial loss will be more pronounced over the ban’s duration, as it will need to convince users to opt for older Apple Watch models, where the choice is easier for users to switch from Apple Watch Ultra 2 to the first edition, given the minimal differences between them.
While there is a significant difference between the latest Apple Watch 9 and older editions, such as the Double Tap feature available in the latest release, users are likely to find it easier to replace the banned models with older ones.
The financial institution based its estimates on the latest statistics from the International Data Corporation (IDC), indicating that Apple sells an average of 43.9 million units annually, with an annual revenue average of $20 billion. The banned Apple Watch models, Apple Watch 9 and Apple Watch Ultra 2, constitute 80% of Apple Watch orders this year. Additionally, the U.S. contributes 30% to the global smartwatch market sales.
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