US regulators give the green light to the newly redesigned Apple watch, but Apple pays a huge price

On Monday, media reports cited court documents from last Friday stating that the U.S. Customs and Border Protection (CBP) has decided that Apple can use a redesigned version of its product that is not subject to the import ban. However, if the U.S. International Trade Commission (ITC) disagrees with the CBP's decision, the court may overturn it.

In October of last year, the ITC found that Apple had infringed on a patent held by Masimo, a medical technology company, regarding blood oxygen detection. As a result, the ITC issued a limited exclusion order that prohibited the import of certain Apple smartwatches into the United States, citing a violation of U.S. trade laws. In December of last year, the White House refused to overturn the ruling, effectively enforcing the sales ban on Apple smartwatches in the U.S.

As a result, Apple announced the suspension of sales of its latest models, the Apple Watch Series 9 and Ultra 2, in the United States. These models were no longer available for purchase on the Apple website, in Apple retail stores, or for import into the U.S.

However, the situation quickly changed. At the end of December, an appeals court in Washington, D.C. temporarily lifted the ban on certain Apple smartwatches imposed by the ITC. This meant that Apple could temporarily resume the sale of its new watches.

On the same day, Masimo announced that Apple had removed the blood oxygen feature from its latest models, the Series 9 and Ultra 2, in order to comply with the import ban resulting from the patent dispute. Masimo also mentioned that the CBP had approved this change on January 12th.

Apple developed a software solution aimed at circumventing the patent dispute and demonstrated this solution to the customs agency last week. Apple explained that the redesigned watches "clearly" do not include the disputed technology, namely pulse oximetry.

The removal of this feature from the Apple Watch is a significant step, as Apple engineers have been working on a software update to modify the blood oxygen application and its algorithms, which could potentially avoid the disputed technology without losing the functionality. However, directly removing this feature may be the fastest way to avoid another ban this month.

Apple's operations team has already begun shipping the modified watches to its retail locations in the United States. Stores have been instructed not to open or sell these modified devices until they receive approval from Apple headquarters. These models may be new versions without the blood oxygen feature.

Regarding Apple's modifications to the new watches, analysts believe that Apple may have paid a high price in order to circumvent the import ban in the United States. While resolving the ban is positive, this modification may weaken customer demand.

In addition, the Federal Circuit Court of Appeals is expected to hear Apple's motion to continue the suspension of the ban as early as this week. Last week, the ITC urged the appeals court to reject Apple's "weak and unconvincing" arguments. Apple has recently faced a series of setbacks, with institutions downgrading its stock one after another, and some even predicting a 30% drop in its share price.

The latest bad news came on Monday. Apple's official website in China unexpectedly lowered prices and will launch a "New Year Limited Time Offer" from January 18th to 21st. Among them, the iPhone 15 series of four models will be reduced by 500 yuan, and some laptop products will be reduced by up to 800 yuan. The iPad Pro, iPad Air, and other products will also see corresponding price reductions. Analysts believe that these price cuts and the Vision Pro are Apple's self-rescue measures in response to declining smartphone sales and being seen as "no longer a growth stock".