Apple will avoid ban by selling latest Apple Watches without blood oxygen feature

Apple will remove the blood oxygen feature from its latest Apple Watches, a move that will allow the company to continue importing and selling the devices in the U.S. as it battles with Masimo in court.

Modified versions of the Apple Watch Series 9 and Ultra 2 will go on sale Thursday, Apple said in a statement. Both devices were introduced in September.

When a user taps on the blood oxygen icon on a modified watch, the display will show an alert directing the user to an explanation on Apple's website, the company said.

For months, Apple has been engaged in an intellectual property dispute with Masimo, a medical device company. In October, the International Trade Commission found that Apple's watch sensors for blood oxygen had infringed on Masimo's patents.

The affected watches were briefly banned in December before Apple got a temporary reprieve. But on Wednesday, an appeals court lifted an injunction that had blocked the ban from taking effect. The court did not overturn the ITC decision, which is currently under appeal.

It's unusual for Apple to remove features from released products. The absence of the blood oxygen sensor could make the device less attractive to some consumers.

"Pending the appeal, Apple is taking steps to comply with the ruling while ensuring customers have access to Apple Watch with limited disruption," an Apple spokesperson told CNBC. "These steps include introducing a version of Apple Watch Series 9 and Apple Watch Ultra 2 in the United States without the Blood Oxygen feature. There is no impact to Apple Watch units previously purchased that include the Blood Oxygen feature."

Apple said it hopes the appeals court eventually reverses the decision, allowing the unmodified watches to go back on store