Business

Apple halting US sales of Series 9, Ultra 2 smartwatches over blood-oxygen patent dispute

By
Social Links for Shannon Thaler
Published Dec. 18, 2023, 11:35 a.m. ET

Apple on Monday said it will halt all sales of its Series 9 and Ultra 2 smartwatches in the US over a patent dispute regarding the technology used to enable the blood oxygen feature on the devices.

The tech behemoth said the two models will no longer be available on its US website as of Dec. 21, and will be yanked from all American retail locations after Dec. 24.

The move comes after an order in October from the US International Trade Commission found the devices violate medical technology company Masimo’s patent rights.

The decision is under review by President Biden until Dec. 25, but Apple said it is preemptively taking steps to comply should the ruling stand. 

The White House declined to comment.

Apple’s lower-end watches will still be available for purchase.

Apple shares closed down 0.9% at $195.89.

Apple Watch Ultra 2 devices
Apple is preemptively taking steps to comply should the ruling stand, the company said. Above, Apple Watch Ultra 2 devices. AFP via Getty Images

Apple has been locked in a years-long battle with Masimo, which has accused Apple of poaching its employees and stealing trade secrets from as early as 2020 in order to develop the blood oxygen-sensing features in its Series 9 and Ultra 2 smartwatches.

The primary dispute centered around technology introduced with the Series 6 Apple Watch, which was announced in September 2020.

Earlier this year, Masimo said it wanted co-ownership and a $3.1 billion payout of the five patents Apple has regarding its pulse oximetry technology, which uses infrared light to track heartbeat-induced pulsations and measure an Apple Watch user’s blood oxygen level, according to an informational PDF document on Apple’s site.

Series 9 watches
Both the Series 9, above, and the Ultra 2 would remain available for purchase outside of the US. REUTERS

The results of these tests are reportedly 95% accurate on Apple’s app.

In January, an ITC judge ruled that Apple had infringed on one of the five Masimo patents in question relating to the SpO2 light-based technology for reading blood-oxygen levels, according to Apple-specific news outlet 9to5Mac.

Though the decision was upheld in October, it remains unclear whether the ITC import ban will stand come the end of the Presidential Review Period that expires on Dec. 25.

A presidential administration has not vetoed an ITC ruling since 2013, when President Barack Obama’s administration overturned an import ban on Apple’s iPhones and iPads from a patent dispute with Samsung.

The Cupertino, Calif.-based tech titan believes the ITC’s findings were erroneous and should be reversed. 

Despite the ban coming just in time for Christmas, Ryan Reith, program vice president for research firm IDC’s mobile device tracking efforts, said that US holiday sales of Apple Watches will not suffer.

The full impact of the ruling, if it stands, will come in January and February, typically some of Apple’s slowest sales months in the US, Reith noted.

Apple’s wearables, home and accessory business, which includes the Apple Watch, AirPods earbuds and other products, brought in $8.28 billion in revenue during the third quarter of 2023, according to a company report.

“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.”

Apple has about a quarter of the global smartwatch market, according to Counterpoint Research – a share that tends to rise to more than a third in the fourth quarter during the US and European holiday sales seasons. Both the Series 9 and the Ultra 2 would remain available for purchase outside of the United States, including during the Lunar New Year season in Asia.

With Post wires