News of Apple planning to suspend sales of its Apple Watch Series 9 and Apple Watch Ultra 2 products during the holidays was front-page news for the Wall Street Journal and numerous other outlets in the week before Christmas, as the world’s most valuable public company (Nasdaq: AAPL) faced up to recent decisions made by the U.S. International Trade Commission in the company’s trade secret theft dispute with Irvine’s Masimo (Nasdaq: MASI).
The moves Apple made to abide by the watch import ban might not have been breaking news for readers of the Business Journal. We’ve tracked the multi-jurisdictional battle between the two firms for several years running, including the October ITC ruling that set the stage for the latest moves.
Wedbush Securities analyst Dan Ives said in a report the decision to take the watches off the shelf in the U.S. “will likely cost Apple about $300-400 million in holiday-season sales,” and “couldn’t have come at a worse possible time.”
Last week, a federal appeals court put a temporary hold on the ban, limiting those losses.
It’s not the end of the world for Apple; the firm last year was the first stock to hit a $3 trillion market capitalization, and the ITC ruling hasn’t appeared to hurt its shares.
The Wedbush report says the iPhone maker could hit a $4 trillion valuation this year.
For more on the case, including thoughts from the local legal team at Knobbe Martens that’s backed Masimo in the dispute, see next week’s print edition.
Few national outlets gave Masimo, now valued around $6.4B, much shot of outgunning Apple in the trade secret dispute given the disparity in their valuations; in that sense the story counts similarities to then Irvine-based Allergan when it battled activist investor Bill Ackman and Valeant in its hostile takeover battle nearly a decade ago.
Most national publications assumed it was a fait accompli that the takeover would be completed largely on Ackman’s terms; their initial bid was about $46B. That ended up not happening as Allergan and its lawyers at Latham & Watkins instead found a white knight in Actavis, which paid $66B for the local firm in 2015.
The Apple-Masimo dispute is far from being concluded: Apple said it “strongly disagrees with the order and is pursuing a range of legal and technical options,” as last week’s federal court move made clear.
Is a settlement on the docket for 2024?
Masimo’s Joe Kiani told Bloomberg TV on Dec. 19 that the “short answer is yes” when asked if a settlement was a possibility between the two companies, echoing comments he made to our Peter J. Brennan earlier in December.
He also said that Masimo would be open to “work with them to improve their product.”
However, Apple hasn’t broached a settlement to date.
“They haven’t called,” Kiani told Bloomberg. “It takes two to tango.”
