Apple Faces $400 mn Hit Due to Halt of Smartwatch Sales Amid Patent Dispute

Apple is facing a hit of $300 million to $400 million in sales in the wake of halting the sale of its latest Apple Watch models, Series 9 and Ultra 2, within the United States.
Apple Watch Ultra 2According to assessments by Wedbush Securities analyst Dan Ives, this suspension comes at a crucial time, impacting a market where Apple was anticipated to generate approximately $120 billion in sales during the October-December period, including the festive shopping spree.

“The sales suspension may not significantly alter Apple’s overall trajectory, but its timing couldn’t be more unfavorable,” Dan Ives remarked.

Apple shipped 8.1 million smartwatches during the second quarter of 2023, commanding 18 percent share, according to Canalys report.

Addressing the situation, an Apple spokesperson stated, “Apple strongly disagrees with the order and is actively exploring various legal and technical avenues to ensure continued availability of the Apple Watch to our customers.”

The decision to cease sales of these smartwatches follows a recent ruling by the International Trade Commission (ITC) amidst an enduring patent dispute between Apple and the medical technology firm, Masimo, centered around the Watch’s blood oxygen sensor (SpO2 sensor) technology.

Apple clarified that this action is a proactive measure to comply with an ITC import ban resulting from the ongoing patent conflict. The ITC upheld a judge’s decision from January, based on two separate cases filed by Masimo, known for its pulse oximeter, alleging patent infringement by Apple related to pulse oximetry technology.

Reports indicate that both the Series 9 and Ultra 2 Apple Watches will be removed from online sales platforms starting December 21, with in-store inventory gradually phased out from retail stores after December 24. This move marks a significant disruption in Apple’s product offerings within the US market.

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