The issue seems likely to be related to activation issues users having been experiencing on our forums. Most notably are a number of users complaining that their new Apple Watch is failing verification upon setup.
Users have been reporting this issue in our forums. BeatCrazy writes:
I realize it's Christmas morning and Apple's activation servers are probably on overload, but this still seems unnecessarily frustrating. I got my two kids (< 18 y/o) Apple Watch SE + Cellular, with plans to activate via Family Setup/sharing. They each already have Apple IDs that are used on iPads regularly.I'm able to start the pairing process using my iPhone, sign into their Apple IDs with their passwords, but I keep getting hung when Apple wants me to enter the passcode of another device. I'm given options like their iPad passcodes, or one of my Macs. After entering any of these, the watch spins for about 2 minutes and I get the error "Verification Failed - There was an error verifying the passcode of your (or insert family member name here) iPhone (or insert iPad/Mac)." Apple gives me a choice to "reset encrypted data", which I take as an offer to destroy all their existing Apple ID passwords and data - not a good option IMO.
A number of users have responded with similar issues in that thread. Meanwhile, another user reports having trouble with HomePod setup today.
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