Apple's Stock Takes a Hit Amid Plans to Stop Apple Watch Sales Due to US Import Ban

On Monday, the stock of Apple Inc. faced a downturn following a report by The Wall Street Journal. According to the publication, Apple is preparing to cease Apple Watch sales in response to a U.S. import ban that targets the device's blood-oxygen sensors.

Understanding the Import Ban

The looming ban focuses on the Apple Watch Series 9 and Apple Watch Ultra 2, as the U.S. International Trade Commission discovered that Apple infringed on patents held by medical-technology firm Masimo Corp. This patent infringement has been ongoing across the majority of Apple's new smartwatch models since 2020.

Market Impact

After the report, Apple’s stock saw a slight drop of 0.8% during the afternoon trading session, counteracting trends observed in both the wider technology sector and the stock market as a whole. This decline threatens to break Apple's impressive success string of seven consecutive weeks, a period during which its stock surged by 17.4%, even reaching a record high on December 14th. Apple, which traditionally hasn't provided specific sales figures for its Apple Watch, reported a broad fiscal fourth-quarter revenue of $9.3 billion for the wearables, home, and accessories category at the end of September.

Apple's Response and Prospects

Apple has expressed its disagreement with the decision of the trade commission and is exploring legal avenues to contest the ruling. The Biden administration holds the potential to overturn the commission's order within a 60-day window. Meanwhile, as Apple’s stock experiences pressure, shares for Masimo Corporation saw a rise of 5.5% in the wake of the news.

Although Apple has faced a 1% decline in stock value since its record peak in December, on a year-to-date basis, it has experienced a notable increase of 50.9%, outpacing the Nasdaq Composite's gain of 42.5% and the Dow Jones Industrial Average's advance of 12.6%.

Apple, Stock, Watch