December 19, 2023
Apple is pausing U.S. sales of its Apple Watch Series 9 and Apple Watch Ultra 2 starting December 21, including from Apple retail locations—and Apple’s website from December 24 in response to a U.S. International Trade Commission ruling, reports Axios.
Stopping sales of new products in the middle of the holiday season is the latest in a series of blows to Apple’s revenue in 2023. Apple is facing a fifth consecutive quarter of shrinking revenue. The company announced in a November earnings call that it does not expect to achieve revenue growth this holiday season.
The sales pause follows accusations from Masimo, a medical device company that also produces fitness-tracking smart watches: Masimo says that Apple’s blood oxygen sensor infringed Masimo’s intellectual property—specifically, its pulse oximetry technology.
Apple strongly disagrees with the order,” an Apple spokesperson told Axios in a statement.
“A Presidential Review Period is in progress,” regarding the ITC order, Apple said, adding, “While the review period will not end until December 25, Apple is preemptively taking steps to comply, should the ruling stand. 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 United States as soon as possible.”
The ruling would impact all watches from Apple Watch 6 onwards, although Apple, itself ,no longer sells earlier models. Sales outside of the United States are not affected. Apple will appeal the ruling.
Masimo first filed a case in U.S. district court in 2020 alleging 17 patent infringement and trade secrets violations against Apple. Frustrated with the slow pace of the federal court process, Masimo then filed a separate case with the U.S. International Trade Commission, which in October ruled that Apple infringed on some of Masimo’s patents.
This sent the case to the Biden Administration for a 60-day Presidential Review Period, which ends on December 25. It is ultimately up to the U.S. Trade Representative to make a final decision, and the president can weigh in with a veto, though that’s rare.
While Apple is frustrated with the prospect of slowing sales, there could be a spike in orders during the 72-hour window to make Apple Watch purchases before they shut off.
Research contact: @axios