Apple Watch Series 9 & Ultra 2 sales halted in US; Impact 'marginal' say analysts
Apple (NASDAQ:AAPL) reportedly informed customers in the U.S. that they will no longer be able to purchase the Apple Watch Series 9 and Apple Watch Ultra 2 directly from Apple starting later this week. According to a report in 9to5Mac, third-party retailers can still sell existing inventory.
This decision follows the International Trade Commission's (ITC) October ruling, upholding a previous judge's decision that Apple infringed on medical technology company Masimo's (NASDAQ:MASI) patents related to blood oxygen level measurement technology incorporated into the latest Watch models.
The infringement excludes the SE line. In response, Apple intends to appeal the ITC's limited exclusion order, which prohibits the import and sale of Apple Watch models with blood oxygen sensing functionality in the U.S., as stated in the company’s 10-K report.
“We estimate the ban theoretically impacts ~$5 bn of sales (1% of total) on an annualized basis—although the true impact will be materially lower and will be driven by: 1) length of the ban; and 2) Apple’s ability to steer U.S. consumers to legacy models, which we would assume is fairly high for the Ultra but likely lower for the Series 9,” analysts at JPMorgan said in a note.
As a result, analysts estimate that the financial impact on Apple will be “marginal.”
A separate article in the Wall Street Journal said that Apple will appeal the ruling and has asked the U.S. government to overturn the ruling as part of the commission review process. The Biden administration has until December 25 to potentially veto the import ban.
Bank of America analysts highlight that Apple Watch has ~50% share of the smartwatch market.
“We expect a drawn-out battle between the involved. We estimate that The
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