Nokia’s digital health unit misses the pulse as company announces strategic review

Nokia’s digital health arm is up for review after fresh struggles from the Finnish vendor to crack the consumer fitness sector.

Patents, brand partnerships and technology licensing businesses are not in the scope of the review.

Officially, Nokia offered little details on the decision, saying in a statement: “The strategic review of the digital health business may or may not result in any transaction or other changes.”

However, in an internal memo obtained by the Verge, Kathrin Buvac, Nokia’s chief strategy officer, said the company needed to face the fact that the business was unlikely to “become a meaningful part of a company as large as Nokia.”

Nokia staked its claim on the digital healthcare space when it snapped up Withings in 2016, hoping to capitalise on the French company’s then-favourable position in the wearables market.

It paid approximately £150 million in the transaction, in what was seen at the time as a long-term investment in the burgeoning consumer health and the IoT field.

Withings completed its rebrand to the Nokia label last June, launching two new connected health products under the Nokia brand at the same time.

However, the division has since struggled to make a profit – Nokia wrote down approximately £125 million on its digital health unit in the third quarter of 2017.

The vendor has also announced 400 job cuts in its home country. This comes after it slashed the workforce of its virtual reality (VR) business by 300 employees in October, in order to focus more of its efforts on healthcare.