Apple has announced that it will stop selling Apple Watch Series 9 and Apple Watch Ultra 2 on its website starting at 3:00 p.m. ET on December 21st, and will not restock the store after December 24th if the stock is sold out.
Why Did Apple Halt Sales of Some Apple Watches So Suddenly?
The reason why Apple Watch has been discontinued in the United States is very simple - patent. In short, the Apple Watch has a blood oxygen monitoring feature, and a medical technology company called Masimo thought that Apple was infringing on several of their patents, so the US International Trade Commission (ITC) investigated the matter, and finally ruled that Apple was infringing on October 26th this year. Since this infringement dispute is a semi-public trial, all that has been disclosed to the public is that it is a dispute over technology related to blood-oxygen monitoring.
In fact, the conflicts between the two companies can even be traced back to 10 years ago. In 2014, the year the first-generation Apple Watch was released, Apple poached two Masimo executives and key engineers, and the seeds of trouble were laid. Over the next few years, the two companies continued to litigate. For example, in 2020, Masimo accused Apple of stealing trade secrets, and Apple countersued and denied it. Therefore, the dispute between Apple and Masimo is not new, but has been going on for almost 10 years, and only recently has a final judgment been reached.
How Much Would the Apple Watch Ban Cost Apple?
The removal of the two Apple Watches has taken a toll on Apple's Christmas shopping season, with estimates of the loss amounting to at least $200 million. While this loss may be small compared to Apple's $12 billion in revenue in the fourth quarter, it's important to note that Apple's smartwatches are the core products of its wearable devices and home accessories business, which accounts for roughly a quarter of the U.S. wearable market and brings in more than $40 billion in revenue annually. Although the current cash loss is indeed a drop in the bucket for the world's first market capitalization company, it's hard for Apple not to be nervous when such a huge wearable market is affected.
Apple financial report data shows that in the fourth quarter of fiscal year 2023 (as of September 30), apple watch alone brought approximately US$17 billion in revenue for Apple. However, as soon as the news of the ban came out, Apple's stock price fell by 1.6% on Monday and closed down by 0.85%.
Will the Apple Watch No Longer Be Available in the US?
There is no need to worry, the suspension only involves the U.S. market, and other markets are not affected at present. The ban is limited to Apple’s official direct sales of two Apple Watches, and American consumers can still purchase related products from other sales channels such as Amazon. However, it should be noted that the products purchased while the ban is in effect will not be able to enjoy Apple’s official after-sales service, which will still have a certain impact on American users.
Apple also emphasized that the ITC's ban only affects sales of Apple Watch Series 9 and Apple Watch Ultra 2, as only these two devices offer the controversial blood oxygen monitoring function, and that the lower-end Apple Watch SE, which doesn't have such a sensor, is unaffected and can still be sold.
It's unclear how long the ban will be in effect. Let's see what measures Apple will take afterward to deal with the ban?
