The U.S. International Trade Commission (ITC) said that Apple (NASDAQ:AAPL) infringed the patent rights of medical technology company Masimo (NASDAQ:MASI). As a result of the ITC’s decision, Apple may face restrictions on the import of specific Apple Watch models. Nonetheless, Apple does not foresee an immediate impact on its watch sales, as indicated in a report by the Wall Street Journal. Meanwhile, in reaction to the news, MASI stock surged over 8% in Thursday’s extended trading session.
Apple vs. Masimo
Masimo lodged a complaint with the ITC in June 2021, asserting that Apple had violated its patents related to the measurement of blood-oxygen levels. In its complaint, Masimo said Apple discussed incorporating its technology into the Apple watch in 2013. Shortly after that, Apple started hiring Masimo employees, including its Chief Medical Officer. Later, in the fall of 2020, Apple launched the Series 6 watch, which was produced in Asia and purportedly equipped with the capability to measure arterial oxygen saturation. According to Masimo, the importation and sale of this product violate several of their patents.
As ITC determined that Apple violated U.S. trade regulations, it imposed a limited exclusion order on certain Apple watches, barring their importation into the U.S. However, President Joe Biden’s administration has a 60-day timeframe to assess whether it should intervene and potentially overrule the import ban. Further, Apple has the right to contest this decision, and the company will appeal ITC’s decision, the Wall Street Journal report highlighted.
It remains to be seen how this case develops and impacts the company’s wearables segment. In the meantime, let’s look at analysts’ recommendations for Apple stock.
Is Apple a Buy, Sell, or Hold?
Wall Street analysts are cautiously optimistic about Apple stock as its hardware sales are under pressure. With 21 Buy and nine Hold recommendations, Apple stock has a Moderate Buy consensus rating. Further, the average AAPL stock price target of $204.8 implies an upside potential of 22.72%.
