The likely sales ban of the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States could cost Apple in the ballpark of $300-$400 million in sales this holiday season, according to Wedbush analyst Daniel Ives (via Business Insider).
Separately, in a note with investors today seen by Supercharged, Ives said despite the turmoil, he remains confident Apple will hit a market cap of $4 trillion by the end of 2024, fueled by strong year-over-year iPhone growth and large upgrade opportunities for consumers in mainland China.
Apple announced earlier this week it would suspend sales of its latest Apple Watch models in its retail and online stores in the United States as a result of an ongoing patent dispute. The dispute, involving Masimo, revolves around the blood oxygen feature in the Apple Watch which measures the amount of oxygen in a wearer’s blood.
Apple’s software engineers are said to be working around the clock to find a software workaround that will not require it to suspend sales of its latest wearables. The effort within Apple is “a high-stakes engineering effort unlike any Apple has undertaken before,” according to sources familiar with the matter who spoke to Bloomberg.
The engineers are looking to change the way the watch measures and then presents blood oxygen measurements to wearers. Masimo, which claims the feature infringes upon its patent, is skeptical that a software-only fix will resolve the dispute, according to the company’s CEO. Apple is, however, confident that changes to watchOS and the underlying algorithm will be enough to end the dispute and resume sales.
Without a veto by President Biden, Apple will suspend the online sales of both models of the Apple Watch on its online store on Thursday, December 21, and then remove marketing material and suspend sales in its stores by December 24. The ban will be imposed by the International Trade Commission.
The Apple Watch Series 9 and Apple Watch Ultra 2 are the latest models in Apple’s watch lineup and join the lower-end Apple Watch SE. The Apple Watch Series 9 and Apple Watch Ultra 2 represent iterative upgrades compared to their predecessors, featuring brighter displays, faster performance, and new features like Double Tap and on-device processing for Siri.
