In a race against time, Apple Inc. AAPL has reportedly been strategizing to salvage its $17 billion smartwatch enterprise in the face of a U.S. ban set to be enforced in a few days.
What Happened: Apple has braced itself for an impending ban imposed by the International Trade Commission, that poses a risk to its smartwatch operations. The ban is due to come into effect on Dec. 25.
To save the business, the tech giant’s engineers have been laboring to tweak algorithms that gauge users’ blood oxygen levels — a feature that Masimo Corp. MASI accuses Cupertino of infringing upon its patent.
The Tim Cook-led company has been trying to make adjustments to the technology that figures out oxygen levels and shows information to users, reported Bloomberg, citing people with knowledge of the matter.
If the White House does not intervene with a veto at the eleventh hour, this ban will strike a significant blow to one of Apple’s primary revenue sources in the U.S. As of now, Apple and Masimo have not entered into settlement talks.
In an attempt to adhere to the ban, Apple has initiated preparations for its stores to adapt to the change, dispatching new promotional signs for the Apple Watch that do not display images of the Series 9 and Ultra 2 models, both of which are covered by the ban.
As per the report, Apple intends to stop selling these aforementioned watches on the website and brick-and-mortar stores by Thursday and Dec. 24, respectively.
An Apple spokesperson said that the company is trying to create a solution to give to the U.S. customs agency, which approves changes to a product so that it can be sold again.
Meanwhile, Masimo has made it clear that only the software fix will be insufficient as "The hardware needs to change," the report noted.
Why It Matters: This isn’t the first time that Apple has faced legal challenges. However, in the current situation, Apple is on the receiving end of a patent infringement claim from Masimo.
If the ban is implemented, it could significantly impact Apple’s revenue and its reliance on overseas suppliers for the watch components and assembly. Moreover, it only affects Apple’s direct sales channels, leaving third-party retailers free to continue selling the device.
Apple’s legal and regulatory challenges underscore the complexities of operating within the tech industry’s legal landscape.
Photo Courtesy: Apple
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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