A potential multimillion-dollar outcome looms for both Apple and Masimo, with the recent court decision potentially leading to a settlement or a technological workaround by Apple, according to analysts. Despite the financial implications, the negative publicity generated by the lawsuit is seen as a bigger concern for Apple.
After the decision, Masimo’s shares dropped by 4.6% to $115.11, while Apple’s shares remained flat at $193.15. Apple, in a statement, expressed enthusiasm about the return of the full Apple Watch lineup for customers, including the Series 9 and Ultra 2 with the blood oxygen feature.
The International Trade Commission (ITC) had previously prohibited the import and sale of Apple Watches equipped with blood-oxygen level reading technology. Apple’s inclusion of a pulse oximeter feature in its Series 6 model in 2020 triggered the legal dispute with Masimo.
Masimo accused Apple of employee poaching, theft of pulse oximetry technology, and its incorporation into Apple Watches. Apple countersued, characterizing Masimo’s legal actions as an attempt to pave the way for its own competing smartwatch.
While the court has temporarily halted the ban, pending a longer-term decision during the appeals process, the ITC is expected to respond to Apple’s request by January 10. Despite the Biden administration’s decision not to veto the ban, Apple is exploring legal and technical options.
The company informed the court that U.S. Customs and Border Protection is assessing redesigned versions of its watches to determine patent infringement. The decision is expected by January 12. Meanwhile, sales of affected devices on Apple’s website and retail locations were paused but remained available through other retailers.
The ban specifically targeted Apple Watches with pulse oximetry, sparing the Apple Watch SE and previously sold models. A jury trial earlier in the year regarding Masimo’s allegations against Apple ended in a mistrial.
Apple’s wearables, home, and accessory business, encompassing products like the Apple Watch and AirPods, generated $8.28 billion in revenue during the third quarter of 2023, according to the company’s report.
