CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
AAPL is set to stop selling the Apple Watch Series 9 and Ultra 2 after 12/24 as it complies with an ITC import ban given the patent dispute with medical device maker Masimo over its SpO2 (pulse oximeter) sensor. We estimate Apple Watch sales are 4%-5% of revenue, with the impact on Dec-Q revenue to be negligible (already benefited from holiday selling season) but has the potential to hurt Mar-Q sales by about 2% if it can’t get the devices back on the shelves. AAPL will still be able to sell the lower-priced SE, while international sales will be unaffected. Barring a veto of the ban from the Biden administration, AAPL will likely look to rely on legal/technical options to get the devices back on the market. This could include an appeal in the Federal Circuit and potential software updates (Masimo says this shouldn’t work as it’s a hardware/software issue). Although the Watch is an important device for AAPL and garnering greater consumer adoption (2/3 of sales still 1st time buyers), AAPL can weather the storm.