On the one hand, there is a major breakthrough, on the other hand, there is a patent battle and an "import ban", which may be the most dramatic period in the nearly 9 years since the Apple Watch came out.
On February 23, Mark Gurman of Bloomberg broke the news that Apple has made a breakthrough in non-invasive blood glucose detection technology, and related functions will be installed on Apple Watch in the future.
The feature, which dates back to the Jobs era, was listed as a "moonshot" project within Apple and has been secretly developed for 12 years. Until now, mainstream blood glucose tests have required blood tests, and the demand for blood glucose testing is considerable.
Jobs
According to data released by the IDF (International Diabetes Federation), the number of diabetic patients in China has exceeded 140 million, which means that about one in every 10 people has diabetes. In addition, blood sugar is particularly concerned about the "insulin resistance" group and the fitness group.
In recent years, the health detection function has become a breakthrough for smart watches to create differentiated competitiveness, and Apple Watch 8 related functions have covered heart rate, blood oxygen, electrocardiogram, body temperature, sleep, etc. Blood-free blood glucose detection technology will undoubtedly make Apple Watch more competitive.
But at the same time as the news of a major breakthrough, Apple Watch is mired in lawsuits on two other health detection functions - blood oxygen, electrocardiogram, and even faces an "import ban", and the worst case may not be available for sale in the United States.
On February 22, the day before the news of the "major breakthrough in blood glucose detection technology" broke, the Office of the United States Trade Representative said in local time that the Biden administration would not overturn a ruling of the US International Trade Commission (ITC).
In December, the ITC ruled that imports of Apple Watches, which infringe AliveCor's patents, should be banned. The so-called patent infringement mainly involves electrocardiogram (ECG) technology, which Apple has involved from Apple Watch 4 to Apple Watch 8. Considering that the Apple Watch is assembled in places such as China, once the "import ban" is implemented, it means that the relevant products will not be able to enter the United States for sale.
AliveCor isn't the only medtech company seeking to ban Apple Watch imports through the ITC.
Last month, the ITC ruled in favor of Masimo, who sued Apple for infringing on five of its pulse oximetry patents, and the approval of the import ban will be decided in May. The Apple Watch involved in oxygen saturation technology includes Series 6 and later versions in addition to the SE series.
The Apple Watch's road ahead in the next few years is promising, but it is also full of thorns.
A
AliveCor has been chasing Apple for more than two years.
The technology company, which manufactures ECG hardware and heart rate monitoring services, sued Apple in December 2020, April 2021 and May 2021 in Texas District Court and the ITC, accusing Apple Watch of infringing three of its KardiaBand patents.
KardiaBand is an ECG wristband designed specifically for the Apple Watch that can detect the user's heart rate, detect abnormalities, and perform an ECG to identify heart problems such as heart fibrillation.
KardiaBand Source: Kardia official website
The wristband was originally released in 2016 and worked with the Apple Watch in 2017, but less than a year later, Apple released the Apple Watch Series 4 with electrocardiogram capabilities. KardiaBand suddenly lost its meaning and ceased sales in June 2019 and was delisted.
In the lawsuit, AliveCor described the process as Apple copying ECG technology after seeing its product succeed, altering the heart rate algorithm of the Apple Watch operating system, making the technology of other heart rate analysis providers incompatible and ultimately excluding competitors. This is a monopolistic practice that hurts not only AliveCor, but also patients and consumers.
Another medical technology company, Masimo, has a longer dispute with Apple, filing a complaint in January 2020 alleging that Apple promised to establish a partnership with it but stole its confidential information and poached several executives. "Confidential information" mainly concerns blood oxygen monitoring technology.
Apple has fiercely countered the allegations of these two companies: one of the big moves is "I am not convinced", denying the allegations and actively responding to the lawsuit; The second big move is to "rebound", counterclaim the other party's infringement and submit a request to the patent office to determine the invalidity of the other party's patent.
Against Masimo, Apple filed a petition to dismiss the case after being sued, and filed an application with the U.S. Patent and Trademark Office to invalidate Masimp's patent. At the fall conference in September of that year, Apple released the Apple Watch Series 6, and blood oxygen monitoring is one of the key features of this device.
Last October, Apple also filed two lawsuits against Masimo, accusing its W1 watch of infringing a number of Apple's patents, and accusing it of "taking the opportunity" to study Apple's intellectual property and obtain confidential information in previous lawsuits.
Masimo W1 Source: Masimo official website
For AliveCor, Apple countersued at the end of last year for infringement of four of its own patents involving Apple Watch sensor technology such as "seamless embedded heart rate monitor" and "health monitoring user interface".
In the lawsuit, Apple explicitly mentions that the purpose of the lawsuit is to prove who is the pioneer of the technology in question and to stop AliveCor's rampant infringement: "Apple is a pioneering innovator, researching, developing, and patenting core underlying technology before AliveCor was founded." ”
In addition, Apple has stepped up lobbying efforts against the AliveCor dispute, hiring as lobbyists for Covington and Shara Aranoff of Berlin, who previously chaired the ITC.
There are examples of Apple pinning hopes on the president's ruling to overturn the ITC.
In 2013, when Obama was in office, he overturned an ITC ruling against Apple, when Samsung and Apple engaged in a patent war, which ruled that Apple had infringed Samsung's intellectual property rights and banned the sale of some older iPhones and iPads.
Obama's veto to overturn the ITC's ruling was the first in 25 years.
But as we all know, the ITC has made a series of rulings against Apple, first ruling that the Apple Watch infringes AliveCor's patent in December and banning the import of the Apple Watch. This was followed by a ruling at the end of January that Apple had infringed two of the five patents in Masino's lawsuit.
This time, the Biden administration decided not to meddle.
B
However, Apple still has a chance.
In the first round of the Masimo case, the ITC has not yet made a decision on whether to approve the import ban, and the results are expected to be announced in May this year.
Although AliveCor won the ITC ruling, there is still a question mark over whether its patent itself is valid. Last December, Apple's "rebound" move won a battle, and the Patent Trial and Appeal Board of the U.S. Patent Office invalidated the AliveCor patent in a related case. Apple's counterclaim in San Francisco federal court for alleged infringement of its patents is still ongoing.
Until AliveCor wins an appeal over patent rights, the ITC injunction against Apple won't go into effect.
According to Patexia in the United States, Apple ranked first in the number of cases in which it became a defendant in patent litigation cases from 2017 to 2020, with 163.
As mentioned earlier, the patent war between Samsung and Apple began in 2012 and lasted for 6 years to settle. Samsung is required to pay Apple $539 million, including three design patents and two utility patent infringement fines.
In addition, the most representative is the "war of the century" between Apple and Qualcomm that lasted for 2 years. Since 2017, the two companies have filed lawsuits against each other in several countries around the world, costing hundreds of millions of dollars. Apple was dissatisfied with the high cost of Qualcomm's patent licensing and launched an offensive with antitrust litigation. The latter sued Apple for patent infringement in courts in the United States, China, Germany and other countries.
By the end of 2018, the parties had conducted more than 50 independent patent and antitrust litigations in 16 jurisdictions in 6 countries around the world.
The "mutual pinching" continued until 2019, when the two giants finally shook hands and signed an agreement to revoke various lawsuits around the world and reach a 6-year license agreement.
Even in China, there is a well-known little i robot v. Apple Siri incident. It was also in 2012, almost at the same time as the patent war between Samsung and Apple, Shanghai Zhizhen Intelligent Company sued Apple Siri for infringing patents related to its own mobile phone and network voice system Xiaoi robot.
This tug-of-war continues even longer than the patent war between Samsung and Apple, which spans up to 10 years. Apple also filed an application in China with the Patent Reexamination Board of the State Intellectual Property Office to invalidate the patent related to Xiaoi robot.
However, after going through a series of processes such as infringement litigation, administrative reconsideration, administrative litigation, administrative appeal and administrative retrial, in 2020, China's Supreme People's Court ruled to confirm the validity of Xiaoi robot's patent.
As far as experience is concerned, Apple has been repeatedly sued for "infringement" over the years, but it has not yet suffered a "catastrophe" and has been tempered into an "old fritters".
The current dispute between Apple Watch and Masimo and AliveCor also has the last step to go - pay the license fee.
After the settlement with Qualcomm that year, the two sides did not announce the compensation fee, but some analysts estimated that the compensation amount was as high as 5 billion to 6 billion US dollars, and the licensing fee of each iPhone was as high as 8~9 US dollars, higher than the 7.5 US dollars per unit before the century war. Although Qualcomm also said that it was confidential, it had revealed that it could at least obtain patent fees of 4.5 billion ~ 4.7 billion US dollars from the settlement.
Shanghai Zhizhen also launched another lawsuit after receiving a Supreme Court judgment, claiming $10 billion from Apple. The case has gone through multiple sessions, the third in August last year, and there is no ruling.
Bloomberg analyst Tamlin Bason believes there is a 60 percent chance that Masimo will enter into a licensing agreement with Apple and receive $50 million to $300 million a year in royalties or damages in a California trade secret trial.
C
Whether it is to continue the lawsuit or reach a settlement, it is certain that Apple will not give up on the fate of the Apple Watch.
In 2014, three years after Jobs' death, Cook stood on stage at the fall launch to announce the Apple Watch, and the auditorium erupted in applause as he followed Jobs' grand finale "One More Thing."
"We believe this product will redefine what people expect from this category. I'm excited and proud to share it with you this morning. This is the next chapter in Apple's story. ”
After the first product was released in 2015, Strategy Analytics reported that Apple Watch had captured 75.5% of the global smartwatch market in a quarter, followed by Samsung with a market share of just 7.5%.
With the intensification of market competition, Apple Watch's market share is not as "scary" as it was at the beginning, but it still ranks first. According to Counterpoint's research, Apple Watch accounted for 34% of all smartwatch shipments in 2022 and 60% of global market revenue.
The North American market is the largest market for smart watches in the world, of which the US market is particularly important for Apple. According to Counterpoint, the U.S. accounts for more than half of Apple's Watch user base.
Last October, according to Cnbeta, research reports showed that Apple Watch achieved its highest half-year "add-on rate," which is the percentage of both active Apple Watch and iPhone users. In 2015, the Apple Watch had an add-on rate of just 10 percent, but now it's 30 percent.
Compared with other brands of smart watches, the biggest feature of Apple Watch is that it can only be used alone or with the iPhone, and cannot be compatible with other brand phones (or system ecology).
At a time when iPhone sales growth is weak and VR/AR and car manufacturing business has not yet landed, Apple Watch is still one of Apple's most important growth points, and can in turn drive iPhone sales growth.
The number of active users of the Apple Watch exceeded 100 million for the first time last year, which is a lot of room for growth compared to the 1 billion iPhone active users worldwide.
Seeking continuous breakthroughs in health functions has become one of the important means for Apple Watch to explore the above growth space.
Apple is not the only smartwatch maker that sees health features as a major competitive selling point. In China, Huawei Watch3 series supports the monitoring of health data such as blood oxygen, sleep, heart rate, and stress, and the OPPO watch is equipped with ECG analysis prompt software, which has obtained the registration certificate of Class II medical devices of the National Medical Products Administration.
Huawei Watch3 Pro
The "blood oxygen detection fever" brought about by the change of domestic epidemic policy at the end of last year also made more people realize the health attributes of smart watches.
In the case that blood oxygen, heart rate, sleep and other data monitoring become the standard of smart watches, blood sugar is the next growth weapon that various smart watch manufacturers are trying to break.
Huawei has announced three health studies, including "innovative blood sugar", at a sports health innovation technology conference in 2022. OPPO has also previously tried non-invasive blood glucose detection on the Watch3 product, which is completed by connecting the patch accessory to the watch.
According to Bloomberg Gurman, Apple's non-invasive blood glucose detection project can be traced back to the Jobs period, and after years of research, the current prototype is about the size of an iPhone, and it is still some distance from being able to cram into a small Apple Watch (without dragging down the volume and battery life of the product).
When the "blood sugar test" is actually stuffed into Apple's watch, it will probably lead to new "infringement" lawsuits against Apple, just as Apple did with the patent dispute between AliveCor and Maniso today.
Resources:
1. Fast Technology: "Qualcomm and Apple settlement can obtain at least $4.5 billion in patent fees: specific confidentiality"
2. Global Network: "US Media: Apple's Prohibition Order Overturned or Subverted the Patent War Pattern"
3, 36 Kr: "Zhi Krypton 丨 once sued Apple, claiming tens of billions, Xiaoi Robot turned to the US stock market to cut "leeks"? 》
4, Lei Technology: "Apple's new Apple Watch big move exposed, hundreds of millions of people's pain points solved"
5, daily economic news: "Apple Qualcomm Hold Hands Again: Like Love or Forced by 5G?" 》
6, Sina Technology: "Apple accused of delaying and Masimo suing the latter of stealing blood oxygen monitoring technology"
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