Apple seeks adjustments to maintain sales of smartwatches – 12/19/2023 – Tech

Just days away from banning the sale of its smartwatches in the US, Apple is planning a mission to try to save the $17 billion business that includes software fixes and other possible workarounds.

The company’s engineers race to make changes to the algorithms that measure the user’s blood oxygen level — a feature that, according to Masimo, violates its patents.

Experts fine-tune the way the technology determines oxygen saturation and presents the data to customers, according to people with knowledge of the matter.

It’s a high-stakes engineering effort unlike any Apple has undertaken before. Although the iPhone maker’s products have already been banned in certain countries due to legal disputes, this restriction would hit one of Apple’s biggest sources of profit in its country of origin — and just at Christmas time.

Without a last-minute veto from the White House, the ban imposed by the ITC (International Trade Commission) would come into effect on December 25th.

Apple could reach a deal with Masimo, although that’s a path the company typically prefers not to take. And the two companies do not seem engaged on this front. For now, Apple is focused on modifying its technology and trying to win approval from regulators.

If the ban is maintained, Apple is working on a series of legal and technical options. It has already started preparing the stores for the change. It sent new posters to its points of sale that promote the Apple Watch without showing photos of the Series 9 and Ultra 2 – two models that are the target of the ban. The company’s lower-cost Watch SE will still be available.

Apple plans to suspend sales of banned watches on its website from Thursday (21) and remove them from around 270 physical stores by December 24.

In a statement, Masimo said the decision to ban Apple Watch models “demonstrates that even the most powerful company in the world must comply with the law.”

Apple’s internal efforts suggest the company believes software changes — rather than a more complicated hardware overhaul — will be enough to bring the device back to store shelves. But the patents at the center of the dispute are mainly related to hardware, including the way light is emitted onto the skin to measure the amount of oxygen in a person’s blood.

An Apple spokeswoman said the company is looking to present an alternative solution to the U.S. customs agency, which is responsible for approving changes to get a product back on the market.

Masimo said a software fix would be an insufficient solution. “The hardware needs to change,” the medical device maker said.

The ITC ban will be reflected in a restriction on imports that will make it impossible for Apple to sell the device in the US. The company relies on foreign suppliers for watch components and assembly.

While Apple plans hardware and software fixes, getting new technology to market takes time. Apple’s internal software testing process is time-consuming, and for good reason. The company needs to ensure that any changes do not harm other features of the smartwatch. Adjustments may also require additional testing due to their medical purpose.

In a scenario where Apple needs to remove device hardware, production and shipping of new models would likely take at least three months, according to a person familiar with the company’s operations. And that doesn’t take into account how long it will take customs to approve the change.