In late December 2023, Apple faced sales suspension of certain Apple Watch models in the United States due to concerns over patent infringement with Masimo’s blood oxygen detection technology.

Despite Apple’s appeal for reinstatement, regulatory authorities will review updated designs presented in mid-January 2024 to determine whether sales suspension persists. The potential financial and time costs associated with settlement or redesign may prompt Apple to reassess the necessity of incorporating blood oxygen detection.

TrendForce’s insight:       

Apple and Masimo’s Prolonged Legal Battle Set to Conclude in Mid-January 2024, Verdict on Blood Oxygen Monitoring Patent Infringement

Since the introduction of the S6 in 2020, Apple Watch has featured blood oxygen monitoring technology, addressing the demand for detecting hidden hypoxia and hypoxemia, particularly in the context of the COVID-19 pandemic. Many smartwatches released during the same period also incorporated this functionality.

The blood oxygen monitoring technology in Apple Watch utilizes traditional pulse oximetry. The built-in sensor consists of red, green, infrared LEDs, and a photodiode sensors that converts light into electric current.

In essence, the technology relies on shining light onto wrist blood vessels to capture data on the difference between oxygenated and deoxygenated blood. Algorithms are then employed to determine the blood oxygen content.

Hence, this technology involves not only software-related analytical applications but also hardware configurations and usage considerations.

In fact, the infringement dispute between Apple and Masimo has been ongoing. Since 2020, Masimo has accused Apple of patent infringement. The legal battle continued until October 2023 when the U.S. International Trade Commission (ITC) ruled in favor of Masimo, determining that Apple had indeed infringed. Consequently, in late 2023, a sales ban was imposed on certain models of Apple watches.

Despite Apple’s appeal allowing them to resume sales, regulatory authorities will reassess Apple’s redesigned models in mid-January 2024 to determine if improvements have been made.

Currently, the most severe impact of the ban is on models with blood oxygen functionality from the S6 onwards, including the S8, while only the SE series, without this feature, remains unaffected.

Diminished Need for Blood Oxygen Monitoring in Temporal Context – Apple May Reconsider Necessity

Given the current situation, there are several possible developments. Firstly, Apple may reapply for approval of a redesigned model by regulatory authorities, allowing them to resume sales after making necessary adjustments.

However, this approach involves not only software modifications but also hardware changes, encompassing testing, review processes, and relaunching, which could take several months. Considering Apple’s usual product release schedule in September each year, the company faces significant time pressure.

Secondly, Apple may opt for a settlement with Masimo. In the past, Apple has resolved disputes over chip technology and intentional slowdown of older devices with Qualcomm and in collective lawsuits with users.

However, settlement amounts were substantial, approximately $4.5 billion with Qualcomm and potentially up to $500 million in the case of collective user lawsuits. Compared to Apple Watch’s annual revenue in 2023, which may not have reached $20 billion, such outcomes may be less favorable for Apple.

If Apple cannot bypass Masimo’s patent through updates, settlement and payment of ongoing patent fees may become a necessary consideration. However, this to some extent may prompt Apple to reevaluate the necessity of the blood oxygen monitoring feature.

After all, for smartwatches equipped with blood oxygen monitoring is intended for health, not medical purposes. Besides Withings’ products, most smartwatches with this feature have not obtained approval from the U.S. Food and Drug Administration (FDA). In other words, they cannot be used for medical purposes.

While having more features at the same price would enhance the product value for consumers, the current context of the post-pandemic era and Apple’s user loyalty suggest that the demand for additional functionalities may vary.

If Apple does not intend to further integrate blood oxygen data with other physiological data, there might be room to reconsider the necessity of redeveloping the technology and the continued existence of the blood oxygen monitoring feature in future Apple Watches. The value of incorporating such functionality may be subject to greater flexibility in this scenario.

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(Photo credit: Apple)

1. Gloomy Global Economy Affects Smartwatch Sales, Predicted 2023 Shipments at 130 Million

In 2023, the trajectory of the smartwatch industry is shaped by two major forces. On one hand, it’s driven by the shift in demand from the smart wristband market, becoming a gateway for brand manufacturers to create market momentum on a global scale. However, it also grapples with the impact of the sluggish economy, which affects consumers’ disposable income, leading to a reduction in market demand.

It’s estimated that the market will grow to 130 million units by the end of 2023. Brand manufacturers’ share of shipments hasn’t seen significant changes, and they continue to introduce innovative products. Apple leads with over 30%, followed by Samsung at nearly 10%, alongside Huawei, Garmin, Fitbit and others.

2. Manufacturers Opt for More Cautious Strategies, Focusing on Minor Upgrades and Diversified Research

Given the uncertain landscape, major smartwatch manufacturers like Apple, Samsung, and Huawei are expected to embrace a more conservative development approach. While they will keep innovating and introducing new products, their design philosophy leans towards incremental upgrades.

High-end watch models will be introduced with caution, targeting well-defined niche markets. Furthermore, some brands are likely to venture into other smart wearable devices, but many of these new devices face challenges in terms of data analysis, application integration, and market maturity, which means it will take time before they become commercially viable.

3. AI Focus: Major Manufacturers Prioritize AI Integration for Accuracy and Innovation

Without making substantial changes to their existing structure, companies are proactively utilizing AI technology as the cornerstone of their development strategy. This approach yields benefits such as fine-tuning existing sensor data for more precise measurements and the creation of applications that cater to consumer needs.

As AI applications heavily rely on chip performance and battery life, companies like Apple are upgrading their chips. This move aims to elevate past auxiliary functions into mainstream operations through AI. Moreover, this technology may further integrate with their Vision Pro devices’ gesture controls, enhancing the overall user experience.

According to a report by TechNews, TrendForce held the Micro LED Forum 2023 on the 5th, inviting numerous companies to share insights on the next-generation display market trends. Eric Chiou, Senior Research Vice President at TrendForce, believes that Micro LED technology is making significant strides in the metaverse sector this year. Many technological challenges need to be overcome, such as semiconductor integration techniques. Ever since AUO announced the mass production of Micro LED watches, cost reduction has become a major focus for many companies.

Chiou stated that to cut costs, chips are the most effective components to optimize. Manufacturers are shifting from using 6-inch wafers to 8-inch wafers for chip production to help reduce costs. In terms of mass transfer techniques, a few years ago, stamp transfer technology was in use, but the industry has been increasingly leaning towards laser transfer while striving for efficiency. In the future, there’s a strong possibility of moving towards a “hybrid transfer” approach, which combines stamp transfer and laser bonding methods.

For instance, companies purchasing equipment might conduct in-house experiments and modify equipment to suit their needs. Equipment providers are also drawing from industry experience to create new solutions, offering next-generation equipment to inexperienced customers, making the production process more practical.

Regarding product development, the most evident direction for Micro LED is in smartwatches. Chiou revealed that by 2026, the cost of a 2.12-inch Micro LED Apple Watch from Apple could potentially drop to $100, compared to the current $40-50 for OLED displays. This suggests that Micro LED may pose strong competition to OLED in the near future.

TrendForce anticipates that Apple Watch will attract more brands to invest in the development and promotion of Micro LED wearable devices, leading to a compound annual growth rate of 873% from 2022 to 2027. This year, the Micro LED chip production value is approximately $27 million, and with the market’s continuous expansion, it is expected to reach $600 million. The compound annual growth rate from 2022 to 2027 is projected to be 111%.

Dr. Mingchi Hsu, Special Assistant at the AUO Display Development Center, mentioned during the forum that the challenges of mass transfer in Micro LED technology were previously considered bottlenecks, but significant improvements have been made in the last two years. As for the inspection and repair aspects, AUO has developed its own equipment and has already completed its development.

Porotech’s primary technologies include Dynamic Pixel Tuning (DPT) and PoroGaN technology. Daniel He, Director of Product and Marketing Taiwan Branch Manager at Porotech, disclosed that they are currently mass-producing 8-inch GaN wafers and collaborating with Taiwanese foundries. Although they can produce 12-inch GaN chips, they plan to observe market response before proceeding.

Mr. Lin Mao-Song, General Manager of Coherent Technologies, a leading laser source technology company, stated that the inspection and repair phase in Micro LED manufacturing might be longer than the actual manufacturing process. A 99.95% yield rate implies a high repair proportion, making it crucial to enhance production yield and reduce costs. Laser technology plays a significant role in increasing production speed and yield, with excimer laser being the best choice for repair and mass transfer, achieving yields of over 99.99%.

According to the news from Taiwan tech media, TechNews, in a groundbreaking move, Samsung has unveiled its inaugural 110-inch Micro LED television, signaling a significant foray into the premium TV segment. Not to be outdone, competitor LG Display (LGD) is reportedly poised to make its own mark by launching a 136-inch Micro LED smart display next year, with initial applications targeted at theaters, indoor conference rooms, and other similar venues.

According to insider sources, LGD is gearing up for mass production of its impressive 136-inch Micro LED display, expected to commence around July of the upcoming year. The initial production goal is set at over 100 units, with deployment primarily earmarked for theaters, indoor conference facilities, and possibly large-scale corporate headquarters.

Notably, LGD’s ambitious 136-inch smart display project is a collaborative effort with Micro LED from Unikorn Semiconductor, which is a subsidiary under Ennostar. Unikorn emphasized the paramount significance of this partnership, affirming substantial breakthroughs in both quality and yield through their joint endeavors. By elaborating during a recent press conference, underlining the imminent production review phase scheduled for the third and fourth quarters – a pivotal juncture that could potentially elevate Micro LED’s contribution to Unikorn’s revenue to a significant proportion. Interestingly, this timeline harmonizes with LGD’s projected rollout of their Micro LED smart display.

But, Ennostar has no comment regarding this development, refraining from disclosing any customer-related particulars.

LGD is currently making assertive strides in the fiercely competitive Micro LED technology landscape. Notably, LGD recently acquired a set of 14 U.S. patents related to Micro LED technology from Taiwanese firm Ultra Display Technology, according to reports from, The Elec, a South Korean media outlet. These patents encompass crucial transfer processes, underscoring LGD’s strategic approach.

Furthermore, whispers from the industry suggest that Apple’s extensive Micro LED transfer process for the Apple Watch could see a significant handover to LGD. This would entail LGD overseeing an integrated workflow, encompassing chip manufacturing, backplane assembly, and transfer processes, while Apple retains responsibility for device design and pivotal technical support. The anticipated mass production timeline for the Micro LED-equipped Apple Watch has been deferred to the first quarter of 2026, a delay likely attributed to the recalibration of the production supply chain.

(Photo credit: LGD)

According to research conducted by TrendForce, the much-anticipated Micro LED version of the Apple Watch is facing yet another delay and is now expected to be launched in the first quarter of 2026. The primary reason behind this delay is believed to be the need for reconfiguring the production supply chain.

Previously, industry speculations suggested that Apple would take charge of the core production process, particularly the massive transfer of Micro LED technology. However, recent industry research by TrendForce indicate that LG Display (LGD) might now take over this crucial aspect of the production process.

The critical process involved in the production of the Micro LED version of the Apple Watch, especially the massive transfer of Micro LED technology, has been a point of interest in the industry. It was widely speculated that Apple would handle this key engineering either at its Cupertino headquarters in the United States or potentially transfer the production to its facility in Longtan, Taiwan, for the essential massive transfer of the technology.

TrendForce understands that Apple’s decision to undertake the crucial engineering process in either the United States or Taiwan reflects their intent to have complete control over the core manufacturing process during the initial production phase. However, this approach also introduces complexities in terms of logistics and supply chain management, as the chips are set to be manufactured in Malaysia, the backplates in South Korea, and the final assembly by system integrators in China or Vietnam.

As a result, recent industry research by TrendForce indicate that Apple has finalized LGD as its primary collaborator for Micro LED production. This means that LGD will now be responsible for the critical massive transfer process. In addition to providing its own equipment and technical support, Apple is also expected to invest in LGD’s related equipment procurement to ensure a smooth transition and expedited progress in the Micro LED production pipeline.

For more information and details about the Micro LED industry, TrendForce will hold the “2023 LED Forum” on September 5th (Tuesday) from 9:30 am to 5:00 pm at the NTUH International Convention Center. The seminar has invited TrendForce’s Senior Research Vice President, Eric Chiou, as well as representatives from various industries such as Mojo Vision, ITRI, Lumus, Unikorn, Porotech, Nitride Semiconductor, Tohoku University, Coherent, InZiv, AUO, and Tianma to share the progress and related applications of Micro LED technology.