The Apple Watch ban, which addresses an issue of potential patent infringement on Apple’s (NASDAQ:AAPL) part, has now taken effect. But even as Apple pulls some models of its Apple Watch out of sales floors, there are still some places where it can be found. And Apple isn’t just quietly accepting the loss of all that business, either. That’s not much comfort to investors, though, who sent Apple shares down in Tuesday afternoon’s trading.
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The Biden Administration previously failed to intervene on Apple’s behalf, which left Apple Watch sales and imports to the United States pretty much a dead issue. Earlier reports from the International Trade Commission (ITC) declared that the Apple Watch used a mechanism in determining blood oxygenation that infringed on a patent held by Masimo (NASDAQ:MASI). While that left Apple somewhat behind the eight ball, it didn’t cut off sales altogether. Third-party sellers like Best Buy (NYSE:BBY) can still sell the devices, and Apple can still appeal to the U.S. Court of Appeals to get the ban lifted.
Apple Filed an Emergency Motion with an Appeals Court
That’s exactly what Apple did one day after Christmas. It filed an emergency motion with an appeals court in the U.S., seeking an emergency counter to the ban order until January 12. A very specific request, with a pretty good reason: Apple retooled its blood oxygenation measurement systems, which means that the retooled versions might pass patent muster and render the ban little more than recall fodder. With Apple’s Wearables, Home, and Accessory business—which includes a range of devices like the Apple Watch—pulling in over $8.2 billion in sales just in the last quarter, it’s clear that Apple needed to fix this issue quickly or potentially risk huge losses.
What is the Fair Value of Apple?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 23 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 49.36% rally in its share price over the past year, the average AAPL price target of $203.07 per share implies 5.17% upside potential.
