Apple has decided to remove the blood oxygen measurement app from its latest Apple Watch models – the Series 9 and Ultra 2 – in order to avoid a US import ban won in a patent lawsuit filed by medical device maker Masimo.
Background of Apple and Masimo’s Legal Dispute
Apple and Masimo have been embroiled in a long-running legal battle over patented technology related to non-invasive blood oxygen monitoring.
Masimo claimed that Apple infringed on its patents with the introduction of a blood oxygen measurement app on the Apple Watch Series 6 in 2020. Masimo holds patents related to accurate measurement of blood oxygen saturation using optical sensors.
In December 2022, the US International Trade Commission (ITC) ruled that Apple infringed on Masimo’s patents and banned import of Apple Watches equipped with the blood oxygen measurement functionality.
Apple’s subsequent request to temporarily halt the ban pending appeal was denied by the ITC. This put Apple’s newest Apple Watch models – unveiled in September 2022 and slated to go on sale in spring 2023 – at risk of not being allowed for sale in the US.
Apple’s Solution: Remove Blood Oxygen App
Faced with the import ban that would prevent the Series 9 and Ultra 2 from reaching American consumers, Apple has come up with a solution – remove the blood oxygen measurement app from those devices.
Apple confirmed that when the new watches launch this year, they will not have the blood oxygen app installed. This change has been approved by US Customs and Border Protection as sufficient to avoid the import ban.
By stripping out the infringing functionality identified by the ITC ruling, Apple paves the way for its next-generation smartwatches to go on sale in its critical home market. The company avoided more drastic options like delayed launch or omission of US sales altogether.
“It’s a meaningless feature so few customers know about or use that I bet most won’t even notice it’s gone,” said industry analyst Neil Cybart of Above Avalon. “Apple likely determined the negative PR from removing the app was better than the business impact of not selling the watches at all.”
|Apple Watch Series 8
|Apple Watch Series 9
|Blood Oxygen App
|Irregular Heart Rhythm Notifications
|Other Health Sensors
|Temperature, Heart Rate
|Temperature, Heart Rate
Table showing difference in features between Apple Watch Series 8 and the newly announced Series 9 as a result of Apple removing the Blood Oxygen app from Series 9
Impact on Apple’s Business
The removal of the blood oxygen measurement capability from Apple’s latest devices could have some impact on Apple’s business going forward.
Loss of a marketing feature – Being able to tout sophisticated health tracking abilities like blood oxygen monitoring has been a key part of Apple’s smartwatch value proposition. Dropping this defeats some of Apple’s competitive differentiation.
Possible effect on sales – Surveys showed only 15% of customers used the blood oxygen app on existing Apple Watches, but the loss of the feature could still deter some buyers or upgraders.
Hands a win to rivals like Fitbit and Garmin – Competitors still have blood oxygen tracking in their devices and could use this news to lure interested customers away from Apple Watch.
However, the overall financial consequences may be manageable for Apple. Apple Watch is an important product but not material to Apple’s overall financial performance, generating an estimated 3-4% of Apple’s nearly $400 billion in annual revenue. Most analysts don’t expect Apple to take a major hit provided it can still sell the new watches in the US.
What’s Next in the Legal Battle?
While Apple’s redesign workaround lifts the import ban for now, the company’s legal fight with Masimo continues. Apple has appealed the ITC’s original patent infringement ruling to the US Court of Appeals for the Federal Circuit.
Oral arguments were heard earlier this month. If Apple convincing overturns the lower court’s finding, it would be free to restore the blood oxygen app to future Apple Watch models without threat of ban.
However most legal experts give Apple long odds to win a reversal. Barring an appellate victory, Apple and Masimo will be back in district court arguing over monetary damages Apple owes for infringing Masimo’s patents.
With the ITC ban sidestepped but the legal war grinding on, the Apple-Masimo patent battle around health tracking tech remains an ongoing headline for the tech giant. This saga seems likely to drag on throughout 2023 and beyond.
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