Apple faces trouble as the International Trade Commission has banned the sale of its latest watch bands, namely the Apple Watch Series 9 and Apple Watch Ultra 2, in the USA. Sales have ceased on their website since December 21st, and retail stores will stop offering these models by December 24th. This setback is significant for Apple, particularly during the Christmas season, which is typically a peak revenue period for the company.
Let’s explore the problem and uncover its consequences, focusing on how it will affect you most importantly.
What’s the reason behind the ban on the Apple Watch?
The US International Trade Commission has recently enforced a prohibition on two of Apple’s newest watch models, specifically the Series 9 and Ultra 2, within the USA. This ruling came about due to a patent dispute with Masimo Corp., a health technology company, concerning a crucial element of these watches: the blood oxygen measurement technology.
Recently, the US International Trade Commission banned two of Apple’s latest watch models—namely, the Series 9 and Ultra 2—from being sold in the USA. This decision stemmed from a patent conflict with Masimo Corp., a health technology firm, regarding a vital feature of these watches: their blood oxygen measurement technology.
As a result, in January 2023, the ITC determined that Apple violated Masimo’s patent rights by employing Pulse Oximetry technology. This led to the prohibition of importing these specific Apple Watch models, directly impacting Apple’s sales in the US market.
This poses a significant challenge for Apple, considering its watch sales soared to $52 million in 2022. The repercussions of this ruling extend beyond Apple, impacting its extensive network of global suppliers responsible for manufacturing and assembling its components. The Apple Watch holds a substantial position in the wearable market, with Apple selling more watches—over 15.4 million units—than the entire Swiss Watch industry combined.
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Impact of Apple Watch Ban
Now, let’s delve into a detailed discussion of all the significant impacts below:
1. Impact on Repairing Out-of-Warranty Models
The recent ban could impact current Apple Watch users significantly. In a memo sent this week to its customer support staff, Apple announced that it would cease repairing out-of-warranty Apple Watch Series 6 models. As a result of these changes, hardware repairs for older iPhones will also no longer be available, although the company will continue assisting with software-related issues. Essentially, this means that if an Apple Watch with a blood oxygen sensor goes out of warranty, Apple won’t service, repair, or replace it. For instance, if the screen of your out-of-warranty Apple Watch Series 6 breaks, Apple won’t be able to offer any assistance.
Moreover, Apple won’t have the option to swap a watch that was bought even before the ban. The only recourse would be to return it for a refund. Consequently, anyone gifted an Apple Watch for Christmas won’t be able to exchange it for a different size or color, which is especially disappointing for both Apple and its customers.
2. Impact on Apple’s Online Sales
The prohibition of the Apple Watch Series 9 and Ultra 2 could significantly influence Apple’s product strategy, given the importance of both watches to the company. This situation might prompt Apple to redirect attention towards other products like the unaffected Apple Watch SE. There are worries about how the ban could affect iPhone sales. Overall, this ban might impact Apple’s total sales and profits, particularly considering the popularity of the affected models.
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3. Impact on the Consumers in the USA
The most affected will be consumers in the USA since Apple has already halted sales and services in the country. The significant drawback is the inability to gift the latest Apple Watch models to loved ones during Christmas. Nonetheless, there are no usage restrictions for customers who bought the affected models before the ban. Apple’s warranty services remain functional, allowing devices within the warranty period to still receive servicing as usual.
The impact primarily falls on new users due to the unavailability of these products, both online and offline. However, certain third-party retailers such as Target Corp., Walmart Inc., and Best Buy Co. can still sell the smartphones despite the ITC restriction, as it solely affects Apple’s direct sales channels.
4. Impact on the Consumers in India
The ban’s impact in India remains minimal as the ITC restricts the sale of these models only in the USA. In India, the Apple Watch Series 9 and Ultra 2 are available and continue to be sold. However, it could affect the import of certain Apple Watch models, including the Series 6, 7, 8, Ultra models, along with the current Series 9 and Ultra 2 that feature the blood oxygen capability. The significant effects of the ban on countries other than the USA are yet to be determined. If the issue persists unresolved for a few weeks, this ban is likely to result in the suspension of sales for these two Apple Watches in India as well.
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What are the available options for Apple at this point?
Apple is making efforts to avert the Apple Watch ban by taking various measures. The Biden administration is closely monitoring the potential veto by the US Trade Representative regarding the decision to restrict nearly all Apple Watch sales in the US due to patent concerns. Nonetheless, the ban is set to come into force on December 26, 2023, and the White House has not intervened thus far.
Apple is working to avoid the Apple Watch ban through different actions. The Biden administration is closely watching the possibility of the US Trade Representative vetoing the decision to limit almost all Apple Watch sales in the US because of patent issues. However, the ban is still scheduled to take effect on December 26, 2023, and the White House hasn’t stepped in yet.
