In a pivotal legal showdown, Apple has announced the removal of blood oxygen monitoring features from its Series 9 and Ultra 2 Apple Watch models in the United States. This strategic move comes in the wake of a protracted legal battle over patented technology with medical tech giant Masimo. The court decision, likely to prolong the dispute for a year, prompted Apple to opt for disabling the feature rather than withdrawing its devices from one of its major markets.
Starting at 6 a.m. Pacific Time on Thursday, Apple will roll out modified Series 9 and Ultra 2 models sans the blood oxygen monitoring capability on its official website and in stores. This development follows the U.S. Court of Appeals for the Federal Circuit’s ruling, preventing Apple from selling these models amid the ongoing legal tussle with Masimo.
Despite the 0.5% dip in Apple shares, closing at $182.68, the tech giant remains resolute in its stance. The dispute originated in December when Masimo secured a decision from the U.S. International Trade Commission (ITC) to halt the import of Apple Watches due to alleged patent infringement. Apple Watches constitute a significant portion of the global smartwatch market, accounting for about a quarter, according to Counterpoint Research.
Masimo’s founder and CEO, Joe Kiani, hailed the court’s decision as a victory for American inventors’ intellectual rights, emphasizing the need for even the largest corporations to respect such rights.
Apple, however, expressed strong disagreement with the ITC decision, vowing to challenge the ruling. Existing Apple Watches and those sold outside the U.S. remain unaffected by the court’s orders.
The modified Series 9 and Ultra 2 models will still feature an app icon for the blood oxygen functions, but users tapping on these icons will receive notifications that the features are no longer available.
Ben Bajarin, CEO of Creative Strategies, anticipated Apple’s move to disable the blood oxygen features in the U.S. models rather than cease sales. While Apple does not disclose specific Apple Watch or U.S. sales figures, North America accounted for approximately 42% of its overall revenue in the previous year.
The ITC’s import ban on the disputed Apple Watch models briefly took effect on December 26 but was lifted by the Federal Circuit on December 27. The legal wrangling between Apple and Masimo centers around accusations of employee poaching and theft of pulse oximetry technology.
As Apple navigates the legal landscape, the wearables sales segment, anchored by the Apple Watch, remains a significant contributor to the company’s overall revenue. The dispute underscores the pivotal role played by wearables in Apple’s diverse product portfolio, with the wearables, home, and accessory business generating $8.28 billion in revenue during the third quarter of 2023.
In a bid to secure its position, Apple has countersued Masimo for patent infringement, characterizing Masimo’s legal actions as an attempt to pave the way for its competing smartwatch.
As the legal saga unfolds, Apple faces critical decisions, balancing legal compliance, technological innovation, and market dynamics in a pivotal chapter for its iconic smartwatch line.
