Apple Watch At The Risk Of Getting Banned?

In shocking news for Apple Watch users, the latest smartwatches, the Watch Series 9 and Ultra 2, may soon vanish from store shelves across the United States. An import ban related to a lengthy patent dispute is set to halt sales of the device beginning December 25, 2023, both online and in retail stores. The ruling stems from a complaint filed by medical device company Masimo Corp., which accused Apple of infringing on patents involving blood oxygen measurement technology.

Masimo sells its own health and wellness wearables that compete with the Apple Watch. While Apple has denied the claims over the years, the US International Trade Commission (ITC) sided with Masimo in October and moved to block imports of the allegedly infringing Apple product. Needless to say, this end-minute major decision has sent shockwaves through both the wearables space and Silicon Valley.

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Apple Watch users are now concerned since the tech giant decided to no longer repair out-of-warranty models from the Apple Watch Series 6 onwards. As per a Bloomberg report, the company revealed this new development in a memo written to its customer service team this week. The new changes mean that Apple will no longer be able to fix hardware problems on older iPhones, although the company will still be able to help users with software-related issues.

The report also notes that Apple employees were told earlier this week that they can’t inform customers about the availability of the Apple Watch at third-party retailers such as Best Buy and Target because of the legal order. The Cupertino-based tech giant will not be allowed to import any more watches until the International Trade Commission’s ban is lifted, but these Apple Watches are expected to be available at the online retail outlets until the US supply runs out.

The report also stated that Apple’s newer watches are not available for purchase on the company’s website in the US. Apple’s official website in the US states that the company “no longer sells Apple Watch units in the United States with the ability to measure blood oxygen.”

What Sealed the Fate of Apple Watches?

The Apple Watch ban is the culmination of a decade-long feud between Apple and Masimo, a medical device company that specialises in pulse oximetry technology. Pulse oximetry, or SpO2, is a way of measuring the oxygen levels in the blood, and it is a feature that Apple added to its Apple Watch Series 6 in 2020. However, Masimo claims that Apple stole its patented SpO2 technology, as well as its trade secrets and employees after the latter approached it for a possible collaboration in 2011.

The company then sued Apple in 2020 in a federal court, alleging that Apple infringed on 10 of its patents and also filed a complaint with the ITC in 2021. Apple countersued in 2022, accusing Masimo of copying the Apple Watch design with its Masimo W1 Medical Watch. The ITC sided with Masimo in January 2023, finding that Apple Watches violated Masimo’s patents, and issued an import ban and a cease-and-desist order against Apple in October, which will take effect after a 60-day presidential review period.

Unless President Biden or the Office of the United States Trade Representative (USTR) intervenes and vetoes the ban, Apple will have to stop selling its Apple Watches in the US by the end of the year. The ban will take effect from December 25, 2023 and will affect newer versions of Apple Watches sold since 2020, including the Apple Watch Series 6, 7, 8, Ultra and Ultra 2.

What Can Apple Do?

The Apple Watch ban will continue to be prohibited by the ITC order until the Cupertino-based tech giant reaches a deal with Masimo or gets relief from the federal government. In the meantime, the Bloomberg report also notes that Apple is working on a software update which it believes will fix the issue. What is the recourse available for Apple?

Option 1

Apple can appeal the decision and ask for a stay on the ban until the appeal is resolved. However, this could take up to 18 months and experts say the chances of getting a stay are slim. According to experts, Apple would have to show that it would suffer irreparable harm if it cannot sell its Apple Watch in the US, which is a hard argument to make given that the product accounts for only a fraction of its revenue and that it can still sell it in other markets.

Option 2

The company will have to redesign the Apple Watch to avoid infringing the patents. The Bloomberg report says that Apple engineers are trying to modify the blood oxygen algorithms on the watches and that the company plans to submit a workaround to the US customs agency to resume sales. However, this could also take time and there is no guarantee that the workaround would be accepted or that it would not infringe other patents.

Option 3

Another way to avoid the import ban altogether is by making the Apple Watch in the US instead of overseas. This would require a major overhaul of Apple’s supply chain and manufacturing capabilities, which is unlikely to happen anytime soon. Apple has been trying to increase its domestic production of some products, such as the Mac Pro, but the Apple Watch is likely too mass-market to be produced locally.

So, the tech giant does have some options at its disposal. They will have to weigh the costs and benefits of each option and decide which one is the best for their business and customers. Although, with less than a week to go, there’s not much Apple can do.

India Market Impacted?

Nope. The ban is a US-only affair since it was ordered by the US International Trade Commission. As such, it only affects the sales of Apple Watch Series 9 and Ultra 2 models in the US, but not in India – or any other country, for that matter.

The Road Ahead

All signs point toward the ban going through. But it does not mean that you’ll never be able to buy another Apple Watch in the US when it’s enforced. The SE model won’t be affected at all. Meanwhile, the Apple Watch Series 9 and Ultra 2 models will continue to sell via third-party retailers until stocks last. This may also trigger something of a gold rush as Apple fans in the US scramble to get their hands on any remaining units.

But Apple being the tech giant that it is, it won’t simply accept an outright ban on such a significant product from its lineup. It will either make nice with Masimo or try to tweak things on the software or hardware side to work around the ban. We’ll have to wait and see which approach they take and how long it takes them to figure it out.