Apple will stop selling some versions of the Apple Watch over an ongoing patent dispute

The backstory: In the world of wearable tech, the Apple Watch isn't just a fashion statement but also a handy health tool. Its health features, like ECG and blood oxygen readings, are key to its global success. In 2022, Apple sold around 49 million smartwatches. And for the first nine months of 2023, the company had already sold nearly 27 million of them. 

But Apple hit a roadblock with health tech giant Masimo back in 2021. Masimo said Apple's 2020 Series 6 Watch violated its patent rights with tech used for its blood-oxygen monitoring feature. But then in October of 2022, Apple hit back, saying it was Masimo that copied Apple, and the company was using the courts to try and get the Apple Watch out of the way to make way for its own smartwatch. Earlier this year, a US judge sided with Masimo, confirming Apple's infringement on its pulse oximeter patents. 

More recently: Two months ago, things heated up when the US International Trade Commission (ITC) issued an order that could ban Apple from importing its watches. But it was still up in the air pending appeal and a presidential review. US President Biden's team had 60 days to review the order and decide whether to veto it or not. If the ruling stands, Apple will be able to appeal that decision on the Federal level.

The development: With the holiday season on the horizon, Apple is in a bit of a tight spot in this tussle. In response to this looming ban, Apple has decided to stop selling some versions of its Apple Watch in order to preemptively comply if it’s upheld. Online sales will halt on December 21, and physical stores will follow suit on Christmas Eve.                                           

Despite this setback, Apple is holding its ground, expressing its intention to appeal the ITC decision if the ban goes into effect. The review period comes to a close on December 25. Historically, the White House has rarely vetoed these kinds of bans, especially when the dispute is between two US companies. On top of that, earlier this year, Biden upheld an ITC ruling that could ban the Apple Watch over its ECG feature.

Key comments: 

"Masimo has wrongly attempted to use the ITC to keep a potentially lifesaving product from millions of U.S. consumers while making way for their own watch that copies Apple," said an Apple spokesperson. "While today’s decision has no immediate impact on sales of Apple Watch, we believe it should be reversed and will continue our efforts to appeal."

“The ITC found that Apple stole Masimo’s patented pulse oximetry technology, which measures blood oxygen,” said Masimo in a statement. “The ITC undertook a thorough legal process and its expert judgment in this matter should be respected, protecting intellectual property rights and maintaining public trust in the United States’ patent system.”

“While Apple is the lead player in the sector with around a 24% market share, it may not actually affect its business too much if it can boost sales in these final few days, assuming there is available stock,” said David McQueen, a director at ABI Research. “It may be able to ride out the holiday season without too much of an impact on sales.”