An ITC decision has forced Apple to halt sales of its latest Apple Watch models, although an analyst report predicts the prohibition will have little impact on revenue.
If the ITC prohibition is upheld, Apple Watch Series 9 and Apple Watch Ultra 2 will no longer be imported into the United States after December 25, 2023. According to J.P. Morgan analysts, the prohibition will affect only around $5 billion in sales, or 1% of total annual sales.
Because Apple distributes its products internationally, the import ban only applies to the United States. Back inventory of previous models will also be available for purchase via third-party retailers.
According to the J.P. Morgan note obtained by AppleInsider, the exact impact of the restriction will be determined by the length of the prohibition and Apple's ability to direct US buyers toward older models. them will most likely be easily persuaded to upgrade to the original Apple Watch Ultra due to minor differences, but converting them to previous main series models may be more difficult.
The analyst note's projections are based on information collected from IDC data. Apple Watch unit shipments are estimated to be 43.9 million per year, with an ASP of $466, implying a revenue of around $20 billion.
The paper assumes that new models account for 80% of shipments and that around 30% of worldwide smartwatches are sold in the United States. That is how J.P. Morgan calculates the annual impact of nearly $5 billion in sales.
Apple intends to appeal the verdict and has requested that the Biden administration overturn it as part of the commission review procedure before December 25. The business is also considering an Apple Watch software upgrade that may satisfy customs and prevent a ban, while patent holder Masimo feels that only a hardware change will prevent a ban.