Apple (AAPL) shares experienced a slight decline of nearly 1% following the company’s announcement that it will be discontinuing the sale of its Apple Watch Series 9 and Apple Watch Ultra 2. This decision comes after the International Trade Commission (ITC) granted medical device maker Masimo (MASI) cease-and-desist and limited exclusion orders against Apple in October, effectively preventing the sale and import of the watches. In order to ensure compliance with the ITC’s orders, Apple has decided to pull the watches from shelves ahead of the review period, which concludes on December 25.
However, Apple does not agree with the ITC’s orders and is currently exploring legal and technical options to make the watches available to its loyal customer base. The disagreement between Apple and Masimo revolves around the use of Masimo’s blood oxygen sensor technology in Apple devices, a patent dispute that has resulted in this controversial ban.
Apple does have a few potential courses of action moving forward. The company has the option to appeal the ITC’s orders, negotiate a settlement with Masimo, or permanently discontinue the sale of the watches. Notably, the ban only applies to direct sales through Apple, meaning that third-party retailers may still have stock available for purchase.
The Apple Watch has been a tremendously successful accessory for Apple, and its discontinuation could have a significant impact on the company’s wearables, home, and accessories business. In fact, the Apple Watch Series 9 currently holds 22% of the global smartwatch market share, making it the top-selling smartwatch worldwide. Following Apple, India’s Fire-Boltt and China’s Huawei rank as the second and third best-selling watch companies, respectively.
Apple’s wearables business has been a major revenue generator for the company, bringing in a total of $39.8 billion in revenue during fiscal year 2023. While this places it behind the iPhone and services businesses, Apple’s wearables division has undoubtedly played a crucial role in its overall financial success.
As the review period for the ITC’s orders comes to a close, it remains to be seen how Apple will navigate this patent disagreement and its impact on the availability and future of the Apple Watch Series 9 and Apple Watch Ultra 2. Apple enthusiasts and investors alike will be eagerly awaiting further updates on this developing situation.
“Social media scholar. Reader. Zombieaholic. Hardcore music maven. Web fanatic. Coffee practitioner. Explorer.”