Apple Inc. strives to defend a business that yields roughly $17 billion annually. The firm is demanding a US sales embargo on its smartwatches after the White House declined to overturn the measure.
Apple will challenge the ban inflicted by the US International Trade Commission over a patent controversy at the US Court of Appeals for the Federal Circuit. On Dec. 26, the company pointed out an emergency motion aiming to lift the prohibition on watch sales while the court assumed its appeal. A patent dispute with medical technology designer Masimo Corp. It has put Apple in the rare.
Apple to appeal ban on US sales of Apple watch https://t.co/V2rAXEjycd
— BBC News (World) (@BBCWorld) December 27, 2023
The situation of fighting to get one of its signature devices back on store shelves. The ITC decided in October that Apple disobeyed two Masimo health-technology patents with a blood-oxygen sensor in its watches. The White House had 60 days to reconsider the import ban, with the judgment resting with US Trade Representative Katherine Tai. The time on that review it had just expired.
“After careful consultations, Ambassador Tai decided not to reverse the ITC’s determination, and the ITC’s decision became final on December 26, 2023,” the Office of the US Trade Representative expressed on Tuesday in a statement.
Apple had already ceased selling its Series 9 and Ultra 2 watches in its online store and US retail platforms. Online sales were suspended on Dec. 21, and the Christmas holiday was the last day to buy a new watch at an Apple retail store.
“We strongly disagree with the USITC decision and resulting exclusion order, and are taking all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the US as soon as possible,” an Apple spokeswoman conveyed.
Apple has developed a software update for the Apple Watch to address the issue. It has presented the design of that update to the US customs agency and, in a Tuesday filing, expressed the government is scheduled to decide on Jan. 12 whether to authorize or deny the changes. A ruling in its favor may allow Apple to resume selling the watch models.
The decision against Apple includes a sales prohibition on its retail channels and a ban against importing the devices into the US. Other retailers, such as Buy Buy Co., Target Inc., and Walmart Inc., can continue marketing the products until stores run out.
The Series 9 and Ultra 2 models generated most of Apple’s watch sales. The lower-end Apple Watch SE, which doesn’t include the blood-oxygen feature, stays on sale. Apple informed staff last week that due to the legal action, they’re not permitted to tell customers the Ultra 2 and Series 9 remain on sale through non-official Apple retail channels.
In a potential probelm for owners of the Apple Watch Series 6, 7, and 8, including the blood-oxygen feature, out—of—warranty watches won’t be suitable for hardware repairs until the embargo is lifted.
The ban’s timing suggests the measure won’t seriously impact the company’s holiday season results. Most people likely finished their shopping before Christmas, and some may have hurried to buy watches after Apple began warning in recent days that the ban was coming.
Based in Cupertino, California, Apple added the blood-oxygen sensor to its watches in 2020 with the Series 6. Masimo sued Apple that same year, blaming the iPhone maker for disobeying several health technology patents and stealing its trade secrets. After meeting Masimo in 2013, Apple hired more than 20 engineers, including its chief medical officer.
In 2021, after the Series 6 went on sale, Masimo whined to the ITC and sought a request. The iPhone creator countersued Masimo in 2022, alleging that the medical device company pocketed the design of the Apple Watch for its own W1 device. Like Apple’s, the Masimo product has a square front and uses a round, puck-shaped charger.
The White House didn’t heavily inform the debate ahead of Tuesday’s statement but has made antitrust enforcement one of its significant policies, with President Joe Biden regularly expressing that competition is a pillar of healthy economies.
The US president can interfere and stop import bans, though such moves are rare. 2013, President Obama vetoed an import embargo on some iPhone and iPad models. But that quarrel was with South Korea-based Samsung Electronics Co., while Masimo is a US corporation.
Masimo’s chief executive officer, Joe Kiani, stated he’d be willing to settle with Apple to finish their dispute, but the company hasn’t been curious. “It takes two tango,” he stated on Bloomberg Television last week.
A lengthy ban would hit one of Apple’s largest moneymakers at a challenging time. Already, the company has been laboring to pull out of a sales recession. Heading into the holiday season, Apple revenue had fallen for four straight quarters, the longest bar in two decades.