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Apple will stop selling its smartwatches through the company’s own US stores before Christmas after losing a patent infringement case, dealing it a blow during the holiday sales season.
The iPhone maker said it would “pre-emptively” halt US sales of two of its latest Apple Watch models, the Series 9 and Ultra 2, on December 21 through its own website and after December 24 in physical stores.
The move comes after the US International Trade Commission issued a “limited exclusion order” against the products in October, threatening a ban on imports of the devices.
A US judge found in January that a headline feature of Apple’s latest watches, a blood oxygen sensor, infringed patents owned by medical device maker Masimo. Apple is appealing against the ITC ruling as it awaits the outcome of a presidential review by Joe Biden, who has the power to veto the ban.
Such vetoes are rare but President Barack Obama intervened in Apple’s favour in 2013 to allow iPhone imports to continue after the company lost an ITC case against Samsung.
The presidential review period ends on December 25 and the devices will still be available until then from other US retailers. Sales in other countries are not affected by the ITC ruling.
If Biden sides with Masimo and Apple’s appeals are unsuccessful, it may have to modify the Watch’s software to remove the blood oxygen feature in order to resume sales.
“Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers,” the company said. “Should the order stand, Apple will continue to take all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the US as soon as possible.”
Masimo chief executive Joe Kiani said in October that the ITC’s ruling “sends a powerful message that even the world’s largest company is not above the law”. Last year, Apple sued Masimo, saying that its smartwatch infringed on the iPhone maker’s patents.
“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,” Masimo said on Monday.
Apple is also embroiled in another legal battle over smartwatch patents with another medical device maker, AliveCor.
Shares in Apple, which hit new all-time highs last week, fell 1 per cent on Monday morning in New York.
Apple is the global market leader in smartwatches, with an estimated 22 per cent share of unit shipments in the third quarter, according to Counterpoint Research.
The company has added new and more sophisticated health monitoring features with each annual release in an effort to keep consumers’ attention. Many shoppers have cut back over the past year on buying costly tech accessories.
Selling accessories such as Apple Watch and AirPods wireless headphones to loyal iPhone owners is increasingly important to Apple’s growth when the smartphone market is generally in decline. Smartphone unit shipments are expected to fall by 5 per cent in 2023, according to market researcher Canalys, following a 12 per cent drop in 2022.
Apple’s range of wearable tech products is set to stand out next year when the company releases Vision Pro, its first “mixed reality” headset and the most significant move into a new product category since Tim Cook took over from co-founder Steve Jobs as chief executive.
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