Apple is pausing sales of its two newest Apple Watch models following a U.S. International Trade Commission (USITC) import ban due to unauthorized use of technology patented by Irvine, California-based medical device maker Masimo. Apple plans to have the Series 9 and Ultra 2 watches removed from its online and retail stores by December 26. The move, which comes at the height of the holiday shopping season, will no doubt prompt a frenzy of in-store purchases between now and Sunday. Apple has the decision under review. Barring reversal, it could take steps to reintroduce the watches.

“The iPhone maker now is racing to make software fixes in a work-around effort to get the product back on the market next year and salvage the $17 billion business generated by its smartwatch sales,” writes Bloomberg. Apple could also try to secure a license, though negotiating after the fact will surely result in a premium rate.

“President Joe Biden’s administration will have 60 days to decide whether to veto the import ban based on policy concerns before it goes into effect,” Reuters reports, noting that U.S. Presidents have rarely vetoed such bans in the past. Apple says it is “preemptively pausing sales in case the decision is upheld,” according to CNET.

“The Apple Watch is one of Apple’s most important products, helping push the company’s wearables, home and accessories business to be its second-largest product category behind the iPhone,” says CNET. The company’s segment earned $41.1 billion in 2022.

“Apple sold 49 million smartwatches in 2022 and about 26.7 million in the first 9 months of 2023,” according to CNN. Apple has previously likened the revenue generated by its wearables unit to that of a Fortune 150 company.

Apple told CNET it will “continue to take all measures to return [the] Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the U.S. as soon as possible,” if the order is not reversed. “Apple’s teams work tirelessly to create products and services that empower users with industry-leading health, wellness and safety features,” the company said in a statement issued to CNET, adding that “Apple strongly disagrees with the order and is pursuing a range of legal and technical options.”

In January, an ITC judge preliminarily ruled in favor of Masimo, finding the two Apple Watch models violated the health tech company’s rights to technology that reads blood-oxygen levels using light. The full commission reaffirmed the decision in October. In May, a hung jury in Masimo’s complaint filed in California federal court resulted in a mistrial.

Reuters reports that “Apple has separately sued Masimo for patent infringement in federal court in Delaware.”

Related:
Apple Stops Online Sales of Watches; Older Models Can’t Be Fixed, Bloomberg, 12/21/23