Apple (AAPL - Free Report) announced that it halted sales of its Apple Watch Series 9 and Apple Watch Ultra 2 in the United States, according to a report by 9to5 Mac. The company removed its flagship smartwatches from the online and physical Apple Stores.
The sales suspension for Apple Watches is a result of an ongoing patent dispute between Apple and medical device company Masimo. In October, the International Trade Commission (“ITC”) ruled that the blood oxygen sensor in the Apple Watch Series 9 and Apple Watch Ultra 2 infringes on two Masimo patents.
Following the ITC decision, the case was sent to a 60-day Presidential Review Period within the Biden administration. President Biden had the authority to veto the ruling but he has chosen not to act.
In response to the ITC ruling, Apple chose to proactively comply by removing the devices from its website on Dec 21 and subsequently from Apple Stores after the specified date.
AAPL will continue to focus on the Apple Watch SE with new marketing materials, which lack the blood oxygen sensor and remain unaffected by the sales ban.
Shares of Apple have gained 49% year to date compared with the Zacks Computer and Technology sector’s 52.3% rise.
Apple’s Watch Ban to Affect Services Revenues
The impact of the ITC ban extends to the company's ability to replace out-of-warranty Apple Watch models. This includes all models ranging from the Apple Watch Series 6 to Series 8 and even the initial Apple Watch Ultra.
Consequently, users with older models featuring the blood oxygen sensor and experiencing issues out of warranty, will be unable to seek assistance from Apple for replacement or repair.
AAPL will still offer support for software-related issues, such as operating system reinstalls. Essentially, users with broken and out-of-warranty devices will have to wait until hardware replacements are permitted in the future.
After Dec 25, the company won't be able to facilitate exchanges for different Apple Watch models, even for purchases made before the ban. However, AAPL will still be able to replace accessories like bands, and watches can be returned for a full refund.
For the Services segment, Apple expects average revenues per week to grow at a similar strong double-digit rate as it did during the September quarter. The Zacks Consensus Estimate for first-quarter fiscal 2024 is pegged at $23.3 billion, indicating year-over-year growth of 4.58%.
Zacks Rank & Stocks to Consider
AAPL carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader technology sector are Baidu (BIDU - Free Report) , Blackbaud (BLKB - Free Report) and Crexendo (CXDO - Free Report) , each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Baidu’s fourth-quarter 2023 earnings has been revised upward by 21 cents to $2.90 per share in the past 60 days. Shares of BIDU have inched up 0.3% year to date.
The Zacks Consensus Estimate for Blackbaud’s fourth-quarter 2023 earnings has been revised downward by 4 cents to $1.04 in the past 60 days. Shares of BLKB have climbed 47.7% year to date.
The Zacks Consensus Estimate for Crexendo’s fourth-quarter 2023 earnings has been revised upward by 3 cents to 6 cents in the past 60 days. Shares of CXDO have rallied 130.5% year to date.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
Apple (AAPL - Free Report) announced that it halted sales of its Apple Watch Series 9 and Apple Watch Ultra 2 in the United States, according to a report by 9to5 Mac. The company removed its flagship smartwatches from the online and physical Apple Stores.
The sales suspension for Apple Watches is a result of an ongoing patent dispute between Apple and medical device company Masimo. In October, the International Trade Commission (“ITC”) ruled that the blood oxygen sensor in the Apple Watch Series 9 and Apple Watch Ultra 2 infringes on two Masimo patents.
Following the ITC decision, the case was sent to a 60-day Presidential Review Period within the Biden administration. President Biden had the authority to veto the ruling but he has chosen not to act.
In response to the ITC ruling, Apple chose to proactively comply by removing the devices from its website on Dec 21 and subsequently from Apple Stores after the specified date.
AAPL will continue to focus on the Apple Watch SE with new marketing materials, which lack the blood oxygen sensor and remain unaffected by the sales ban.
Shares of Apple have gained 49% year to date compared with the Zacks Computer and Technology sector’s 52.3% rise.
Apple’s Watch Ban to Affect Services Revenues
The impact of the ITC ban extends to the company's ability to replace out-of-warranty Apple Watch models. This includes all models ranging from the Apple Watch Series 6 to Series 8 and even the initial Apple Watch Ultra.
Consequently, users with older models featuring the blood oxygen sensor and experiencing issues out of warranty, will be unable to seek assistance from Apple for replacement or repair.
AAPL will still offer support for software-related issues, such as operating system reinstalls. Essentially, users with broken and out-of-warranty devices will have to wait until hardware replacements are permitted in the future.
After Dec 25, the company won't be able to facilitate exchanges for different Apple Watch models, even for purchases made before the ban. However, AAPL will still be able to replace accessories like bands, and watches can be returned for a full refund.
For the Services segment, Apple expects average revenues per week to grow at a similar strong double-digit rate as it did during the September quarter. The Zacks Consensus Estimate for first-quarter fiscal 2024 is pegged at $23.3 billion, indicating year-over-year growth of 4.58%.
Zacks Rank & Stocks to Consider
AAPL carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader technology sector are Baidu (BIDU - Free Report) , Blackbaud (BLKB - Free Report) and Crexendo (CXDO - Free Report) , each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Baidu’s fourth-quarter 2023 earnings has been revised upward by 21 cents to $2.90 per share in the past 60 days. Shares of BIDU have inched up 0.3% year to date.
The Zacks Consensus Estimate for Blackbaud’s fourth-quarter 2023 earnings has been revised downward by 4 cents to $1.04 in the past 60 days. Shares of BLKB have climbed 47.7% year to date.
The Zacks Consensus Estimate for Crexendo’s fourth-quarter 2023 earnings has been revised upward by 3 cents to 6 cents in the past 60 days. Shares of CXDO have rallied 130.5% year to date.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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