The Apple Watch has not received any "release" from the US government.
On December 26th local time, after a 60 day presidential review period by the US government, the Apple Watch ban issued by the International Trade Commission (ITC) officially came into effect, and the Apple Watch Ultra 2 and Apple Watch Series 9 with blood oxygen sensor technology were discontinued in the United States. Last week, in order to comply with ITC's decision, Apple had already suspended sales of these two Apple watches in the United States in advance.
This ban is part of a long-standing patent dispute between Apple and medical technology company Masimo over blood oxygen sensor technology. Starting from 2020, Apple began incorporating blood oxygen detection into its smartwatch, making its debut in the Series 6 model. In 2021, Massmore Medical sued Apple, accusing it of stealing its patented technology. ITC announced in October this year that it upheld the judgment made by the judge in January of this year, which found that the Apple Watch had infringed on the patent of Massmore Medical.
Subsequently, the case was submitted to the US government for a 60 day presidential review period. During this process, US President Biden had the power to veto this ruling, but this did not happen.
According to foreign media reports, Apple announced on the same day that it had filed an appeal against ITC's decision, requesting an emergency restraining order from the United States Federal Circuit Court of Appeals, stating that ITC's decision was incorrect. Apple stated in its submitted legal documents that if the ban remains unchanged, the company will suffer "irreparable harm.".
Apple also requested the Federal Circuit Court of Appeals to temporarily lift the sales ban on these two watches during its appeal period, until the US Customs and Border Protection (CBP) determines whether the redesigned Apple watch has infringed on the patents of Massmore Medical. According to Apple, the customs office must make a decision before January 12th.
Apple wrote in a statement on the same day, "We strongly oppose the decision of the United States International Trade Commission and the accompanying lockdown. The company is taking all measures to bring the Apple Watch Series 9 and Apple Watch Ultra 2 back to the United States as soon as possible."
On the 26th, the stock price of MASI Medical (Nasdaq: MASI) closed at $120.62 per share, up 2.19%, reaching the highest level since August this year. The stock price of Apple (Nasdaq: AAPL) closed at $193.05 per share, down 0.28%.
The affected Apple Watch Series 9 and Apple Watch Ultra 2 were released in September last year and are currently the main models of Apple watches, starting at $399 and $799 respectively. The discontinuation is expected to have a significant impact on holiday season sales.
As of September 30, 2023, Apple's fourth quarter of fiscal year 2023 (third quarter of the calendar year) results showed revenue of $9.322 billion for wearable devices, home products, and accessories, including Apple watches, compared to $9.65 billion in the same period last year, which did not meet analyst expectations.
The ITC ban will only affect the sales of Apple Watch Series 9 and Apple Watch Ultra 2, as these devices have blood oxygen monitoring capabilities. Low end Apple Watch SE models without such sensors are not affected.
The ITC ruling prohibits Apple from officially selling affected models in the United States, and also prohibits all imports of Apple Watch Series 9 and Ultra 2 into the United States. At present, this means that these devices can still be purchased from other retailers, including Amazon and Best Buy, but the supply of Apple watches from these retailers may be affected in the future.
Nicholas Matich, an intellectual property lawyer at McKool Smith law firm, stated that companies typically reach a settlement for such disputes between Apple and Massmore Medical, but Apple may believe that it can avoid infringement disputes by quickly redesigning or removing related features, so it did not choose to settle.
Analysts from Stifel Financial pointed out that they predict that Apple may delay the ITC's final ruling on this case by about a year by filing an appeal.