Apple (AAPL.O) declared on Monday that it would put a pause on its sales of some of the smartwatches in the United States from this week. The company is halting the sales of Series 9 and Ultra 2 smartwatches in the country as it is dealing with a patent dispute over the technology used in the watches that enables the blood oxygen feature. This move follows an order in October from the U.S. International Trade Commission (ITC) that could potentially bar the company from importing the Apple Watches. This came after the information that Apple smartwatches violated medical technology company Masimo’s (MASI.O) patent rights.
However, the final decision is still under review by President Joe Biden until Dec. 25. Meanwhile Apple said that the company is taking necessary decisions and steps that comprise the ruling stand. The Office of the U.S. Trade Representative, who is part of the Biden administration handling the case, said that Ambassador Katherine Tai “is carefully considering all factors in this case.” If it is not vetoed, the ban will go into complete effect on December 26th.
The company mentioned that it is going to pause sales of the smartwatches of Series 9 and Ultra 2 from its website starting on December 21st, and from retail locations after December 24th. Other models would be available such as the lower-priced Apple Watch SE model as they do not contain the blood oxygen sensor so will be unaffected by the dispute. The program vice president for research firm IDC’s mobile device tracking efforts, Ryan Reith said that the holiday sales for Apple watches will not suffer from this. Even if the ruling stands, the full impact of it will come in between January-February which are typically the company’s slowest sales months of the year anyway.
“Apple has plenty of inventory of Watch 8 and SE so they will have products available during that time,” Reith said. “The bigger implication is around whether or not Apple can use the blood oxygen sensor technology that is in question on future devices, or if they’ll have to reach a settlement or come up with a new solution,” he continued.
On the other hand, Masimo CEO Joe Kiani told CNBC in October that he was open to negotiating a deal with Apple. In a public statement out on Monday Masimo said that the ITC decision “should be respected, protecting intellectual property rights and maintaining public trust in the United States’ patent system and encouraging US industry.”
According to Counterpoint Research Apple has about a quarter of the international smartwatch market which is a share that tends to rise more than a third in the last quarter during the European and U.S holiday sales season every year. Both the Ultra 2 and Series 9 would be available to purchase outside of the United States including during another big holiday season, the Lunar New Year season in Asia.
