In a major development, Apple has announced the suspension of sales for its flagship models, the Apple Watch Series 9 and Apple Watch Ultra 2, in the United States. The move comes as a response to a recent ruling by the International Trade Commission (ITC) in an ongoing patent dispute with medical technology company Masimo.

Apple’s blood oxygen sensor technology for the Apple Watch was found to violate Masimo’s patents by the ITC in October, following a lengthy dispute. As a result, Apple has decided to halt sales preemptively, anticipating compliance with the ITC’s decision. The ban is set to take effect after 3 p.m. ET on Thursday, December 21, with in-store inventory unavailable after December 24.

On the other hand, Masimo, the medical technology company at the center of the dispute, sees the ITC’s ban as a validation that even a tech giant like Apple is not above the law. The company remains engaged in ongoing legal battles, including a mistrial in a district court case.

Presidential Review Period and Apple’s Stand:

The case now enters a 60-day Presidential Review Period, ending on December 25, during which President Biden could veto the ruling. Apple, in a statement, expressed disagreement with the ITC’s decision and is exploring legal and technical options to ensure the availability of the Apple Watch Series 9 and Ultra 2 to customers.

Effect on Market, and Future Course:

The ITC’s ban solely affects the sales of the Apple Watch Series 9 and Ultra 2, given their blood oxygen monitoring capabilities. The lower-end Apple Watch SE, lacking this feature, remains unaffected and will remain available. While the ban restricts Apple’s sales, other outlets, including Amazon and Best Buy, may still offer these models.

Apple plans to file an appeal with the U.S. Court of Appeals for the Federal Circuit on December 26, challenging the ITC’s decision. However, appealing the decision will not delay the ban’s immediate impact. Apple’s future actions remain uncertain, including potential settlements, licensing agreements with Masimo, or design alterations. The company assures customers that it is actively working to resume sales as soon as possible.

As the clock ticks down on the Presidential Review Period, the tech world awaits the fate of Apple’s iconic wearable series, with potential ramifications for the broader wearables market.

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In a significant move, China has imposed a ban on the use of iPhones by central government officials, according to reports from unnamed sources familiar with the matter. The news sent shockwaves through the market, causing Apple shares to plummet by 3.6%, marking the company’s largest daily drop in a month, with the stock closing at $182.91 in New York. Prior to this, Apple had enjoyed a 46% increase in its stock value this year.

The Wall Street Journal reports that managers have been relaying the ban to their staff through various means, including chat groups and meetings. Despite attempts to seek clarification from both China’s Ministry of Foreign Affairs and Apple, no official response has been received.

Remarkably, sources indicate that Chinese officials had already been informally steering clear of iPhones for some time, even before the pandemic, though there was no formal policy in place. Instead, these officials have increasingly favored smartphones manufactured by domestic companies, most notably Huawei.

This development follows a broader trend of tensions between China and the United States, which has seen restrictions placed on various Chinese tech companies. In a parallel move, some Chinese government ministries previously banned Teslas from their premises due to security concerns.

Apple’s CEO, Tim Cook, had previously made a high-profile visit to China, highlighting the country’s importance as both a market and a manufacturing hub, contributing approximately 19% of the company’s total revenue.

This iPhone ban for government officials may be viewed as a retaliatory measure in response to actions taken by the United States against Chinese technology companies. It has the potential to impact not only Apple but also other foreign brands with established operations in China.

In recent years, Huawei and ZTE have faced ongoing restrictions imposed by the U.S., with the Biden administration going so far as to halt approvals of new telecommunications equipment from these companies due to perceived national security risks.

This ban on iPhones could signal that China is unwilling to exempt any U.S. company from its efforts to reduce reliance on American technologies. China represents one of Apple’s most significant markets, generating nearly a fifth of its total revenue. 

While the immediate impact on earnings remains uncertain, given the iPhone’s popularity in China, analysts believe that this move will serve as a stark reminder of the complex relationship between international companies and China, especially amid ongoing geopolitical challenges.

Related:

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(via)

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A court in Colombia has banned the sale of 5G iPhones and iPads in the country. This is the culmination of the Ericsson patent case. The court ruled that the specified Apple products infringe on a patent owned by Ericsson.

The Bogota court ruled in favor of Ericsson who had accused Apple of infringing on its 5G patent. The court in the country’s capital ruled that Apple’s 5G hardware infringed on a 2019 Ericsson patent which subsists till 2035. The ruling was made back in April and Ericsson has proceeded to enforce the ruling. Ericsson posted a $50,000 bond in May 2022. The Court thereafter ordered a preliminary injunction last week which affects Apple’s Colombia subsidiary.

The court injunction specifically bans apple from importing, selling, advertising, or commercializing any products that infringe on the patent. The Court also put on notice the regulatory authorities in the country to ensure compliance with the injunction. The order by the court has resulted in Apple filing an antisuit damages case in a Texas court.

Apple claims that the Colombian injunction gives Ericsson an undue advantage to pressure Apple into paying royalties. It is thus seeking an order from the court that Ericsson must indemnify Apple for any fines, fees, penalties, and costs due to the Colombian injunction.

The present case adds to the raft of patent lawsuits relating to the patents. There are several other lawsuits in Europe, the UK, and the US.

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(source)

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