iPhone XS and XS Max in silver, space gray, and gold.
Apple Acknowledges Apple Watch Series 3 Issue Where 'Edge Stripes' Appear on Display
In an internal memo distributed to Genius Bars and Apple Authorized Service Providers, Apple said the issue is to be treated like any other Apple Watch repair. Since the issue appears to be a manufacturing defect, the repair should be free under Apple's standard one-year limited warranty policy.
Apple's memo, obtained by MacRumors, identifies GPS models as being affected and not cellular models. The difference could be the result of LTE models having a different display assembly with an integrated antenna.
To verify the issue, a Genius Bar or Apple Authorized Service Provider employee will ask the customer to rub their finger on the display to allow smearing to appear. If no edge stripes are found, Apple's instructions are to clean the display and have the customer breathe on the display edge to create humidity.
Apple's memo doesn't confirm the underlying reason for the issue. Given the steps to reproduce the issue, however, it sounds like the edge stripes may appear as a result of moisture collecting under the display.
While we can verify this information is accurate, Apple doesn't always acknowledge its internal service policies when a customer brings it up. We don't know exactly why this is the case, but be aware that your mileage may vary.