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  • Voltaire Staff

US ban forces Apple to pull out watches from online shelves

Image Courtesy: Unsplash

Apple Inc. has stopped selling two of its latest Apple Watch models in the United States online, a few days before a ban related to a patent dispute takes effect.

The company won't be able to repair watches that are out of warranty anymore, which could be a problem for customers. The newest Apple Watch models are no longer available for purchase on the company's website, and the company previously announced it would stop sales at its physical stores in the US on December 24.

The development comes consequent to a ban was imposed by the US International Trade Commission, or ITC, which found that Apple violated two patents related to blood oxygen sensing held by Masimo Corp, based in Irvine, California.

Apple stopped online sales of these watches earlier so that they could be sent to customers before a ban on December 25. Sales will still continue at Apple's international online and in-person stores.

Masimo claims that Apple's incorporation of the blood oxygen monitoring feature, initially introduced in Apple Watch Series 6 and later models, infringes on Masimo's patented technology. The firm argues that Apple adopted its unique algorithms and configurations of light sensors, enabling similar blood oxygen measurements.

Additionally, Masimo accuses Apple of improperly employing trade secrets, which involve confidential information containing specific technical details and know-how crucial to their pulse oximetry technology. Masimo also alleges that Apple recruited some of its employees.

On Wednesday, the ITC rejected Apple's request to delay the ban while waiting for an appeal.

Since the patent issue is specifically related to the SpO2 sensor, Apple is still allowed to sell its more affordable Apple Watch SE, which does not include this sensor. The SpO2 feature was introduced with the Apple Watch Series 6 in 2020 and has been included in every flagship Apple smartwatch since.

Apple has also removed refurbished versions of two earlier watches with SpO2 sensors, the Series 7 and Series 8, from its online store.

Two special editions of the Series 9 -- the Apple Watch Nike and Apple Watch Hermès -- have also been taken off the shelves.

In addition to the sales ban, Apple's customer service teams were told that the company won't replace out-of-warranty models going back to Apple Watch Series 6. This means that if a customer has a broken screen, Apple won't be able to fix it. The company will still offer help that can be done through software, like reinstalling the operating system.

Apple, unable to fix most hardware issues with the smart watch before the ban, usually replaced the units.

The decision to stop watch replacements affects most new Apple Watches sold since 2020, including Series 6, 7, 8, and Ultra, in addition to the current 9 and Ultra 2.

After December 25, Apple won't be able to exchange watches -- say for a different colour or size, during the typical return period -- bought before the ban. However, watches can still be returned for a refund.

Apple employees were informed that they can't tell customers that the Apple Watch is still available at third-party retailers due to the legal order. The watch will likely remain available at those outlets until the existing supply in the US runs out.

The San Francisco-based firm can't import more watches until after the commission's order is lifted. The ban remains in effect until Apple reaches a licencing agreement with Masimo, gets a federal reprieve, or solves the problem. Apple is working on a software update it believes will help resolve the issue.

Bloomberg previously reported that Apple's engineers are working on altering the software of the affected devices to avoid infringing on Masimo's patents. This involves changing how the algorithms measure blood oxygen levels and how that data is presented to the wearer.

However, Masimo argues that the underlying patents are related to hardware, suggesting that software adjustments may not be sufficient to resolve the issue.

The Bloomberg article surmised that implementing hardware changes could take at least three months, considering the time required for Apple to manufacture and ship new watches.

Apple, though, has another option, that is, reach a settlement with Masimo, which Masimo's CEO, Joe Kiani, is open to, but is yet to be approached.

In a statement released on Monday, Apple spokesperson Nikki Rothberg stated that the company "strongly disagrees" with the ITC's ruling and is actively "exploring various legal and technical alternatives to ensure that Apple Watch remains accessible to customers."

For Indian customers, the current impact of the US ban is not significant. The sales and availability of Apple Watches in India have not been affected, and the Apple Watch Ultra 2 and the Watch Series 9 are still available for purchase. However, the broader consequences of this ban on Apple's activities in other nations, including India, are still uncertain.

According to Counterpoint research, Apple maintains its stronghold in the smartwatch market, representing 34.1 per cent of shipments and contributing to 60 per cent of global revenue in 2022. Despite a 3 per cent year-on-year decline in Q4 of 2022 due to inflation and slow India growth, Apple's diverse smartwatch lineup, including the premium Ultra model, drove an average selling price increase.

Apple's shipments increased by 17 per cent in 2022, surpassing 50 million units, widening the gap with second-place Samsung, which holds around 10 per cent of the market with a 12 per cent year-on-year increase in shipments.







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