🍎 Watch wars

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Tonight: A long-running patent dispute has Apple halting sales for some of its wildly popular smartwatches. Plus: Cities are losing their bus depots to a notorious hedge fund. Let's get into it.

By Allison Morrow

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Last updated December 18 at 6:59 PM ET

🍎 WATCH WAR

Gabby Jones/Bloomberg/Getty Images

Just days before Christmas, Apple is yanking some versions of its popular smartwatch from the shelves while it tries to resolve a bitter patent dispute with a rival company.

Here's the deal: The feud centers on the watches' pulse oximeter feature that uses light-based technology to read blood-oxygen levels. That tech is crucial to Apple's sales pitch that its watches can be life-saving. But it is also patented by a California-based medical-technology company called Masimo.

Back in October, the International Trade Commission ruled in Masimo's favor, saying that Apple violated the patent.

Apple disagrees with the ruling, of course, but it is preemptively suspending sales of certain Apple Watch devices — the Series 9 and Ultra 2 — to make sure it's in compliance with a US import ban that's scheduled to go into effect Christmas Day.

The import ban isn't a done deal. The Biden administration has until December 25 to overturn the October order if it disagrees with the ruling. And Apple could potentially implement a software update that allows it to skirt the tech in dispute.

"Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers," Apple said in a statement.

Big picture

This patent war has been going on for years, my colleague Samantha Murphy Kelly writes.

Masimo CEO Joe Kiani told CNN he believes Apple's decision to halt the sale of the devices is merely a tactic to put pressure on the Biden administration.

"This has been a deliberate infringement," Kiani said.

Earlier this year, the Wall Street Journal reported that Masimo and several other companies accused Apple of ripping off their technology, allegations Apple denies.

"When Apple takes an interest in a company, it's the kiss of death," Kiani told WSJ. "First, you get all excited. Then you realize that the long-term plan is to do it themselves and take it all."

Bottom line

The Masimo dispute is a thorn in Apple's side, but investors aren't sweating the potential sales impact too much. Apple's stock, up 57% from January, fell less than a percentage point Monday.

David McQueen, an analyst at ABI Research, said the decision to leave the watches available for purchase in stores until December 24 should help soften the financial impact, giving shoppers a few days left to buy the devices ahead of Christmas.

Apple, he said, "may be able to ride out the holiday season without too much of an impact on sales."

NUMBER OF THE DAY

$14.1 billion

US Steel, a 122-year-old former symbol of American industrial might, struck a deal to be acquired by Japan's Nippon Steel.

The $14.1 billion deal "is truly best for all," said US Steel CEO David Burritt. "US Steel's best days are ahead, together."

Pittsburgh-based US Steel was created in 1901 when a group led by J.P. Morgan and Charles Schwab bought the steel company owned by Andrew Carnegie and combined it with their holdings in its rival Federal Steel company. The new company became the world's first to be valued at more than $1 billion, double the entire US budget that year. It also vaulted Carnegie to the status of the world's wealthiest person.

🚌 TRANSIT CRISIS

Intercity bus lines like Greyhound, Trailways and Megabus are an overlooked but essential part of America's transportation system.

Those buses carry twice the number of people who take Amtrak every year. But the whole network faces a growing crisis, my colleague Nathaniel Meyersohn reports.

Here's the deal: Bus terminals often sit on lucrative real estate in city centers. But the terminals are expensive to maintain, prompting Greyhound and other private companies to close or relocate them.

Adding fuel to that firesale is the presence of a deep-pocketed buyer, Alden Global Capital — the hedge fund known for buying up local newspapers, gutting their staff and selling their assets.

Last year, Alden subsidiary Twenty Lake Holdings purchased 33 Greyhound stations for $140 million. It's now selling the depots to real estate developers.

"It is clear what is happening here: An important piece of transit infrastructure is being sacrificed in the name of higher profits," said Stijn Van Nieuwerburgh, a professor of real estate at Columbia Business School.

Twenty Lake Holdings did not respond to requests for comment. Attempts to reach Alden were unsuccessful.

Why it matters

Around 60 million people depend on intercity buses.

Roughly three-quarters of intercity bus riders have annual incomes of less than $40,000. More than a quarter would not make their trip if bus service was not available, according to surveys by Midwestern governments reviewed by DePaul University.

"All this happening at once is really startling," said Joseph Schwieterman, a DePaul University professor who researches intercity bus travel. "You're taking mobility away from disproportionately low-income and mobility-challenged citizens who don't have other options."

Intercity bus riders are also disproportionately minorities, people with disabilities, and unemployed travelers.

"The public sector has turned a cold shoulder to buses," Schwieterman said. "We subsidize public transit abundantly, but we don't see this as an extension of our transit system. Few governments view it as their mandate."

A spokesperson for Greyhound, which is now owned by German company FlixMobility, said it strives to offer customers the most options for connections, but has "encountered challenges in some instances."

Read Nathaniel's full story here.

WHAT ELSE IS GOING ON?

🚚 Nikola founder Trevor Milton was sentenced to four years in prison for lying to investors about the company's hydrogen and electric truck technology.

💰 The crypto industry, ready to turn the page on 2023 and all the Sam Bankman-Fried-related drama that came with it, has been funneling tens of millions of dollars into a political war chest to help prop up pro-crypto candidates.

✈️ The federal government is fining Southwest Airlines $140 million for last year's historic, 10-day holiday meltdown that stranded more than 2 million travelers.

📈 Oil and natural gas prices rose sharply after BP said it would pause all shipments through the Red Sea because of increased attacks on commercial vessels by Houthi militants from Yemen.