Nokia Plans To Sell Its Digital Health Business to The Co-Founder Of Withings
- Nokia is planning to sell its health-tech business acquired by the company two years ago. Â
- It is confirmed that this branch of Nokia's business is not performing well.
- Nokia is shifting to become primarily business-to-business (B2B) and licensing company.
Nokia purchased Withings and its health-tech business two years ago for a $191 million. After completely re-branding the products which included fitness tracker watches and a smart scale device, the company created its own division in 2017 and named it Digital Health. However, it seems like Nokia isn't happy with how this division is performing.
Today, Nokia is announcing a plan to sell its health-tech business called Digital Health. Currently, there is no further information about the deal itself, but we know that it will be sold to Éric Carreel, who is one of the founders of Withings, a French startup that was actually bought by Nokia in the first place.
Image Courtesy Of DealOScope
The first indication of Digital Health's low performance was introduced in February this year when a leaked internal memo showed up, following the "strategic review" of this division and the fact that Nokia wrote-down $164 million on assets for this division.The leaked memo states that there is no path for Digital Health to become a meaningful part of Nokia. The Verge says these indications were confirmed when the company released their first-quarter earnings report for 2018. According to this report, Digital Health business brought in only $20 million in revenue against the $5.9 billion for the rest of Nokia's revenue.
Nokia also stated that selling the Digital Health business is a part of this company's new goal to shift its focus primarily towards being a business-to-business and licensing company. With these intentions, the company will concentrate on selling telecommunications hardware and licensing its patents from the 90s and 2000s. The complete sale of Digital Health is expected to be finished during the second quarter of 2018. There is no information about what will happen to the Withings brand.