Shares of Apple (AAPL) fell nearly 1% Monday after the company said it will halt sales of its Apple Watch Series 9 and Apple Watch Ultra 2 in the coming days. Apple will remove the watches from its online stores by the afternoon of Dec. 21 and from physical stores by Dec. 24.
The decision to pull the watches comes after the International Trade Commission (ITC) granted medical device maker Masimo (MASI) cease-and-desist and limited exclusion orders preventing Apple from importing and selling the Series 9 and Ultra 2 in the US in October.
That kicked off a review period during which the Biden administration could veto the orders. The review period ends Dec. 25. Apple is pulling its watches ahead of time to ensure it is in compliance if the White House doesn't come to the company's aid.
"Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers," the company said in a statement.
"Should the order stand, Apple will continue to take all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the US as soon as possible,” the company added.
The fight over the watches has to do with a patent disagreement between Apple and Masimo over whether Apple unfairly used Masimo's blood oxygen sensor technology in its devices.
The ITC found in favor of Masimo on some of its claims and against the company on others, but the outcome remains the same. Apple has to either pull the watches, appeal the orders after the review period ends on Dec. 25, or reach a settlement with Masimo.
Importantly, the ban only applies to sales of the Apple Watch Series 9 and Ultra 2 sold directly through Apple. So, if you go to a Best Buy or other location that has them in stock, you can still buy them after Dec. 21 and Dec. 24. Once those stocks run dry though, Apple won't be able to import any new versions of the watches to the US. Apple, however, will still be able to import and sell the Apple Watch SE.
The Apple Watch line is one of Apple's most successful accessories. It not only provides the company with user lock-in by getting consumers to stick to its ecosystem of products, it's also a means to get users to sign up for the Apple Fitness+ subscription service.
Apple doesn't break out individual sales numbers for its watches. Instead, the company reports sales as part of its wearables, home, and accessories business. That segment brought in $39.8 billion in revenue in the company's fiscal 2023, making it Apple's third-largest business behind the iPhone, which made $200.6 billion last year, and services, which was responsible for $85.2 billion in revenue.
The Apple Watch is the world's best-selling smartwatch, capturing 22% of global market share as of Q3 2023, according to Counterpoint Research. India's Fire-Boltt and China's Huawei make up the second and third best-selling watch companies, capturing 10% and 9% of the market, respectively.
Daniel Howley is the tech editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.
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