Apple Watch’s $920 Million Patent Lawsuit Defeat and Its Impact on the Wearable Market

This morning, truly shocking news came in. Apple has lost a patent lawsuit against Masimo regarding blood oxygen measurement and has been ordered to pay a staggering $920 million in damages. Can you grasp how large this amount is? Considering Apple’s net profit for the third quarter of 2024 was approximately 23 trillion won, this represents about 4% of that, a substantial sum.

In fact, this patent lawsuit has been ongoing for quite some time. Masimo, a medical device specialist company based in Irvine, California, has been filing a lawsuit against Apple for infringing on its blood oxygen measurement technology patent since 2020. Founded in 1989, Masimo is a global leader in the field of hospital pulse oximeters. With annual sales of about 1.5 trillion won, it may be a smaller company compared to Apple, but it possesses unparalleled technological prowess in the medical device sector.

Personally, I think this ruling will have a significant ripple effect on the wearable healthcare market. The blood oxygen measurement feature of the Apple Watch has been one of the key features introduced since the Series 6 in 2020. During the COVID-19 pandemic, as interest in blood oxygen saturation increased, this feature served as a differentiating point for the Apple Watch.

What is truly interesting is that even while this lawsuit was ongoing, the market share of the Apple Watch continued to rise. As of 2025, Apple holds about 36% of the global smartwatch market. Samsung Electronics has about 10%, and Huawei about 8%, solidifying Apple’s dominant position. In the domestic market, the Apple Watch accounts for over 60% of the premium smartwatch market.

Key Issues and Technical Background of the Patent Lawsuit

The core of this lawsuit is the optical sensor technology for measuring blood oxygen saturation. The patent held by Masimo pertains to the core algorithm for measuring blood oxygen saturation using infrared and red light. Although this technology seems simple, it actually requires very sophisticated signal processing and noise reduction technology.

The blood oxygen sensor in the Apple Watch Series 6 uses LEDs and photodiodes to measure the oxygen saturation in the wrist’s blood vessels, and it seems the court determined that Masimo’s patented technology was used in this process. Masimo has claimed that its SET (Signal Extraction Technology) patent was infringed upon.

Interestingly, Masimo is not merely a patent troll. It is a company that manufactures professional medical devices used in hospitals and produces highly accurate pulse oximeters approved by the FDA. In contrast, the blood oxygen measurement feature of the Apple Watch is limited to wellness purposes rather than medical use, and its accuracy has a larger margin of error compared to medical devices.

In fact, this difference in accuracy is also a limitation of wearable devices. Optical sensors measuring from the wrist are inherently less accurate than dedicated pulse oximeters measuring from the fingertip due to various factors such as skin thickness, blood vessel depth, and movement affecting the measurement.

Impact on the Industry as a Whole

The reason this ruling is so important is that it could affect not only Apple but the entire wearable healthcare market. Other wearable manufacturers like Samsung Electronics’ Galaxy Watch, Fitbit, and Garmin also offer similar blood oxygen measurement features. If Masimo were to file patent lawsuits against them as well, the entire wearable market could suffer a significant blow.

Particularly for Samsung Electronics, which has equipped its Galaxy Watch 4 with an SpO2 sensor, it uses a technology similar to that of the Apple Watch. However, Samsung claims to use its own developed sensors and algorithms, so the possibility of a direct patent dispute with Masimo seems relatively low. But it cannot be considered completely safe.

Changes are also expected in the domestic wearable market. Currently, the domestic smartwatch market is about 3 million units annually, with the Apple Watch accounting for about 1.8 million units and the Samsung Galaxy Watch about 800,000 units. If Apple has to remove or restrict the blood oxygen measurement feature, it could be an opportunity for Samsung Electronics.

In fact, such a situation is already happening in the United States. From the end of 2023, the Apple Watch Series 9 and Ultra 2 sold in the U.S. are being released with the blood oxygen measurement feature deactivated. This is due to an import ban order from the U.S. International Trade Commission (ITC), and as long as the patent dispute with Masimo continues, such restrictions are likely to persist.

But the truly ironic part is that Apple continues to lead the smartwatch market despite this situation. According to IDC data, Apple shipped 12 million units in the third quarter of 2025, an 8.3% increase from the same period last year, even with the blood oxygen measurement feature restricted.

This shows that the competitiveness of the Apple Watch does not rely solely on a single feature. Various healthcare functions such as ECG measurement, fall detection, sleep tracking, and exercise monitoring, along with perfect integration with the iOS ecosystem, continue to act as strong differentiating factors.

However, in the long term, there will likely be an impact. Particularly in the healthcare sector, Apple’s pace of innovation may slow down. To avoid patent disputes, they will have to be more cautious in introducing new medical features. In fact, Apple is working on developing next-generation healthcare features such as blood glucose measurement and blood pressure monitoring, which also have a high possibility of conflicting with existing medical device companies’ patents.

Personally, I think this incident will bring significant changes to the patent strategy of the wearable industry. Previously, the focus was on software and hardware integration, but now securing patents for core sensor technologies and algorithms will become even more important. Apple seems to be already moving in this direction.

From Masimo’s perspective, this victory is significant beyond merely securing compensation, as it confirms their technological superiority in the medical device field. In fact, Masimo’s stock price surged more than 15% after the ruling was announced. Given that a company with a market capitalization of about 8 trillion won won against Apple, which has a market cap of about 570 trillion won, it’s no wonder investors are paying attention.

It will also be interesting to see what strategy Apple will adopt going forward. They could simply pay the $920 million in damages, but they might also consider entering into a licensing agreement with Masimo or even attempt an acquisition. With Apple’s cash reserves amounting to about 200 trillion won, acquiring the entire Masimo is entirely possible.

However, personally, I think Apple will focus more on developing its own technology. They are already operating a large healthcare research team at their headquarters in Cupertino, California, and investing about 35 trillion won annually in R&D. This patent dispute might accelerate their efforts to secure independent technology in the medical device field.

Ultimately, this incident seems to be a natural phenomenon as the wearable healthcare market enters maturity. Initially, the focus was on rapid market expansion, but now the time has come when technological differentiation and patent competitiveness are becoming more important. From a consumer perspective, there might be some short-term restrictions on certain features, but in the long term, it will likely lead to the development of more sophisticated and safer healthcare technology.

This article was written after reading the [Breaking News] Apple Watch ‘Blood Oxygen Measurement’ Patent Lawsuit Loss … “Pay $920 Million” article, adding personal opinions and analysis.

Disclaimer: This blog is not a news outlet, and the content is the author’s personal opinion. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.