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Apple Faces Lawsuit for Heartbeat Monitoring Patent Violation

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Apple (AAPL - Free Report) was recently sued by a New York University cardiologist over Apple Watch’s use of his patented heartbeat monitoring invention, per Bloomberg.

A suit was filed by Dr. Joseph Wiesel, a teacher at NYU School of Medicine, claiming the Apple Watch infringes his patent for a method to detect an irregular heartbeat.

The doctor said he first contacted Apple in September 2017, giving the California-based tech giant detailed information about the patent.  The company refused to negotiate, which led to the lawsuit being filed.

The doctor wants the court to order Apple to pay him royalties and to block the company from using his invention without permission.
 

Apple Inc. Price and Consensus

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Will the Lawsuit to Hurt Apple Watch Sales?

The news comes at a time when Apple’s smartwatches are witnessing increased adoption in the market.

Notably, per Strategy Analytics data, 6.8 million smartwatches were shipped by the company in third quarter 2019, up 51% from the year-ago quarter figure of 4.5 million units.

This was largely driven by Apple’s focus on integrating health monitoring features in its watches due to growing awareness about health and fitness among consumers.

Notably, Apple Watch Series 5, which released in September, comes with added features like Cycle Tracking, the Noise app and Activity Trends.

The removal of the heartbeat monitoring feature could turn out to be a huge blow for the product, which is known to have saved multiple lives in the past. Thus, it is crucial for the company to reach a settlement with the doctor in case the lawsuit turns out to be legitimate.

Intensifying Competition

Apple is facing competition in the fitness smartwatch segment from companies like Fitbit (FIT - Free Report) , Garmin (GRMN - Free Report) and Samsung, which are gaining traction in the market.

Notably, Fitbit, which was acquired by Alphabet’s (GOOGL - Free Report) Google in November, launched the Versa 2 smartwatch, which comes with features like Sleep Score, Smart wake and estimated oxygen variation graph while Garmin rolled out Vivoactive 4 and 4S smartwatches with features like advanced sleep tracking, respiration tracking and Body Battery energy monitoring.

Moreover, Samsung is rapidly penetrating the fitness tracking smartwatch space with its expanding family of Galaxy Watches.

Although Apple currently dominates the smartwatch segment, the loss of key features like heartbeat monitoring could hurt its competitive position in the long run.

Zack Rank

Apple currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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