- Two years ago, Nokia bought French company Withings with the intent of entering the smart health market.
- Now it seems that the Withings brand, now known as Digital Health, is not doing well, and Nokia might want to sell.
- Nokia also announced it could eliminate 425 jobs at its headquarters in Finland.
Only a few days ago, we posted an article detailing the overwhelming success of the Nokia smartphone brand in 2017. Jumping from zero to 11 on the list of global smartphone brands is nothing to sneer at.
However, the Nokia smartphone brand is actually not owned by Nokia itself; the company sold the brand to Microsoft in 2013. After it became clear that Windows Phone wasn’t going to attain any significant market share, Microsoft gave part of the Nokia brand to HMD Global. Now, powered by Android, Nokia smartphones are making a big comeback. But Nokia proper, the multi-billion-dollar electronics company, is facing its own issues.
In 2016 Nokia bought the French company Withings, with the intent of launching itself into the digital health business. Withings developed health-centric electronics like smartwatches, fitness bands, sleep trackers, thermometers, and scales, and Nokia’s purchase of the company put it in a terrific position to enter the developing market.
But apparently things have gone awry. Yesterday, Nokia posted a press release on its website that announced the company’s intent to make a “review of strategic options for its Digital Health business.” In other words, the Digital Health arm is not doing so hot, and Nokia is wondering if anyone wants to take it.
Granted, Nokia clarifies in the release that, “The strategic review of the Digital Health business may or may not result in any transaction or other changes,” so we can’t say with any certainty what’s going on. But it’s safe to assume that the purchase of Withings may not be paying off like Nokia expected it would.
Really though, this news is not too surprising; last fall, Nokia took a write-down of $164 million on its digital health business. Since it purchased Withings for $192 million, the whole thing mostly became a wash. At this point, it would make far more sense financially for Nokia to sell off its Digital Health arm for a song than it would be to continue developing products and paying staff.
Speaking of staff, there’s more bad news there: Nokia also said it could shed up to 425 jobs in its home country of Finland. Ouch.