Apple will cease selling two smartwatches, the Apple Watch S9 and Apple Watch Ultra 2, in the United States due to infringement of their blood oxygen measurement technology.
Apple stated in a statement that it will suspend sales of the Apple Watch S9 and Apple Watch Ultra 2 on the Apple official website starting from December 21st; Starting from December 24th, its sales in Apple retail stores will be suspended. Apple Watch SE without blood oxygen measurement function is not affected, and Apple Watch in overseas markets outside the United States is also not affected.
At the end of October this year, the International Trade Commission (ITC) in the United States ruled on a patent dispute over blood oxygen sensor technology between Apple and medical device company Masimo: Apple's Apple Watch with blood oxygen measurement function infringed Masimo's blood oxygen technology patent, and the infringing product will be prohibited from being imported into the United States.
At present, this ban is still awaiting review by the Biden administration. If Biden does not veto it, the ban will take effect on December 26th and Apple will not be able to sell these two watches in the United States.
The Apple Watch S9 and Apple Watch Ultra 2 are both new products launched by Apple at its autumn launch event in September this year. They are also flagship products in the Apple Watch, with prices starting at 2999 yuan and 6499 yuan respectively. The health monitoring features of the Apple Watch S9 include blood oxygen measurement, recording psychological status, and tracking sleep and menstrual periods. The Apple Watch Ultra 2 is primarily designed for outdoor sports and also supports blood oxygen measurement.
Masimo is a medical equipment company headquartered in Irvine, California, USA. It mainly produces non-invasive heart monitoring devices, pulse oximeters, and more. The Masimo W1 smartwatch is one of the company's main products, divided into medical and sports versions, which can provide patients with real-time pulse oxygen saturation and other health parameters. The sports W1 watch is priced at $499 (approximately RMB 3564).
The Apple Watch S6, released in 2020, is the first smartwatch under Apple to support blood oxygen measurement. In 2020, Masimo first sued Apple, claiming that 10 of its patents had been infringed, and also pointed out that Apple was suspected of stealing trade secrets by hiring key personnel. In 2021, Masimo filed another lawsuit and pointed out that Apple's previously released Apple Watch S6 should be banned from sale.
In 2022, Apple also filed a lawsuit against Masimo, accusing its W1 series smartwatches of infringing on multiple of its patents. Apple stated that it was in the previous lawsuit that Masimo "carefully studied Apple's intellectual property" and obtained confidential information.
Apple's financial report data shows that in the fourth quarter of the 2023 fiscal year (as of September 30), sales of wearable devices, home furnishings, and accessories, including Apple Watch and AirPods, were $9.322 billion, a year-on-year decrease of 3.4%, accounting for 10.4% of the total revenue in the fourth quarter.
According to Counterpoint Research data, the global smartwatch market has recovered since the second quarter of this year and continued a positive trend in the third quarter. In the third quarter, global smartwatch shipments increased by 9% year-on-year, while Apple smartwatch shipments increased by 7% year-on-year, with a global market share of up to 45%.
Health monitoring is a key technological direction for the development of smart watches. According to data from iMedia Consulting, among the many functions of smartwatches, health data monitoring is the most commonly used function by surveyed users, accounting for 61.1%, followed by GPS positioning (55.7%) and exercise recording function (54.7%).
Industry insiders believe that Apple has a large inventory of Apple Watch S8 and Apple Watch SE, which can provide products during lockdown periods. The greater impact lies in whether Apple can use controversial blood oxygen measurement technology on future devices, or whether Apple and Masimo must reach a settlement or propose new solutions. Apple believes that ITC's ruling is incorrect and will appeal if it takes effect.