Unveiling the Apple Watch Fiasco: 4 Key Facts to Remember
Apple Watch shortage looms as availability dwindles in the US Discover the reasons behind Apple's move, including President Biden's involvement, and uncover the implications for the tech giant
Apple will cease selling certain versions of its popular smartwatch in the United States in anticipation of a significant patent dispute, making it more challenging to find the latest models of the Apple Watch. This change will take effect later this week.
Due to a recent ruling by the International Trade Commission finding Apple in violation of Masimo's pulse oximeter patent, Apple has made the unprecedented decision to remove a popular product from store shelves. The technology in question uses light to read blood-oxygen levels, which Apple incorporated into its Apple Watch. Now, Apple may face a ban on these models unless they make substantial changes to the device or if the ruling is vetoed by President Joe Biden during the review period, which lasts until December 25th. Apple has stated that they are taking preemptive steps to comply with the ruling by removing some products from the market.
Heres a closer look at everything you need to know:
What models will be unavailable?
Apple announced to CNN that it will discontinue the sales of the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States, with sales on Apple.com ending on Thursday and in retail locations after December 24. While other models will still be available for purchase, there could be difficulty obtaining them if an import ban is imposed, potentially affecting the availability of the Apple Watch Series 6 and later, as well as all models of the Apple Watch Ultra. However, the sales of the Apple Watch SE are not expected to be impacted by the ban, according to Apple. Despite this announcement, some retailers, such as Best Buy, have confirmed they will continue to sell the devices.
If the order stands, Apple said it will "continue to take all measures" to make it available for customers "as soon as possible."
Why is Apple doing this?
Apple's choice to remove one of its top-selling products from the market comes after a prolonged disagreement with Masimo regarding its blood oxygen feature. The company has consistently promoted its smartwatch as a life-saving tool, contributing to its status as the most sought-after watch globally. However, the conflict with Masimo poses a threat to this reputation.
The recent ruling by the ITC, which determined that multiple Apple Watches violated Masimo's pulse oximeter patents, has initiated a review period. During this time, Apple has the option to negotiate a licensing agreement with Masimo or challenge the ban.
Masimo CEO Joe Kiani told CNN that Apple has not reached out to the company for a licensing agreement or a settlement, but he is willing to consider both. Apple, on the other hand, firmly believes that the ITC's findings are inaccurate and plans to appeal the decision to the Federal Circuit. The company has also submitted evidence showing how a ban would have a negative impact on healthcare, scientific and medical research, and users of the Apple Watch who rely on its health-related features such as ECG and blood oxygen monitoring. Pulse oximeters can be especially beneficial for individuals with health conditions like asthma, lung cancer, and heart failure.
Kiani believes that the decision to stop selling the devices is the most recent development in the ongoing patent battle. Masimo has claimed in court that Apple hired over twenty of its employees before releasing its W1 medical smartwatch in May 2022.
Tensions escalated further last year when Apple filed two patent infringement lawsuits against Masimo, alleging that the company copied patented Apple Watch features for its W1 device.
Why is President Biden involved?
President Biden must review the ITC's ruling within 60 days before a potential ban takes effect. This is not the first instance of a president intervening in a patent issue involving Apple.
Does this matter to Apple?
President Obama's veto of an ITC ruling in 2013 prevented the banning of older iPhones and iPads, following a determination that Apple had violated one of Samsung's patents. The New York Times reported that this was the first time in over 25 years that the administration had overruled an ITC ban.
Jitesh Ubrani, a research manager at market research firm, IDC, stated that Apple's reputation is at stake. "It's not a positive image," he cautioned. "There might be a decrease in sales in the upcoming quarter, but ultimately, no one wants to be accused of patent infringement."
He remarked that Apple's choice to withdraw the devices prior to the end of the review period is an attempt to "improve their image."
"They want to demonstrate their commitment to following the law while also being financially responsible," Ubrani expressed.
Regarding sales, David McQueen, a director at ABI Research, noted that keeping the watches available for purchase in stores until December 24th will help mitigate the financial impact of the decision, giving shoppers a few extra days to buy the devices before Christmas.
Despite Apple's dominant position in the market with a 24% share, the potential boost in sales in the remaining days of the holiday season may not significantly impact its business, provided there is sufficient stock. The company may be able to weather the holiday season with minimal impact on its sales. In 2022, Apple sold 49 million smartwatches, and in the first 9 months of 2023, approximately 26.7 million units were sold.
"It will be interesting to see how long the dispute will last, or when Apple opens its wallet, and when the ban will be lifted," he added.
