Apple Watch ban in the US could be just a minor setback for Apple’s earnings،
Apple recently made a quick decision to stop selling the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States. The move stems from the need to comply with a looming ban following a court ruling earlier this year, which found Apple guilty of infringing the pulse oximeter patent held by medical technology company Masimo. In light of this situation, AppleInsider reveals that analysts at global financial services leader JP Morgan predict the effect of the ban will reach around $5 billion in sales, equivalent to just 1% of Apple's total annual sales. Simply put, if the International Trade Commission (ITC) ban persists and Apple Watch Series 9 And Apple Watch Ultra2 If they are banned from entering the United States, the impact on Apple's revenue will be relatively minor. The estimates contained in the analyst note are based on data from IDC, a global player in market intelligence. According to IDC, Apple ships approximately 43.9 million Apple Watch units per year, with an average selling price (ASP) of $466, generating an estimated revenue of $20 billion.
Assuming that new models account for 80% of shipments and that about 30% of the world's smartwatches are sold in the United States, JP Morgan arrives at a rough figure of $5 billion impact on total annual sales. For reference, Apple's annual revenue for 2022 was $394.328 billion.
The JP Morgan note highlights that the true impact of the ban depends on two factors: the length of the ban and Apple's ability to encourage American consumers to switch to older models. Directing customers to the initial Apple Watch Ultra seems like a breeze due to minimal differences, but convincing them to opt for older series models could pose a more difficult task.
Despite the cessation of direct sales, fear not: third-party retailers maintain a stockpile of older models, ready to meet the needs of eager customers. Apple also has a few tricks up its sleeve to keep the Watch Series 9 and Watch Ultra 2 on shelves. One option in play involves Apple's engineering team racing against time, tweaking the algorithms that power the pulse oximeter on the market. Apple Watch Series 9 and Ultra 2. The goal? Ensuring that this functionality no longer encroaches on Massimo patent territory.
Additionally, Apple, not one to accept setbacks, plans to appeal the decision and has called on the Biden administration to intervene before December 25.
