Oh no! It looks like one of Nokia businesses is not going well. News brought out that the company is selling the Digital Health business to the original owner. Keep scrolling for more details!
Not long ago, Nokia has announced plans to sell its failing health tech line back to Éric Carreel, co-founder of Withings. Previously, the company bought this French startup in 2016. Terms and conditions of the deal have not been public, but the company is surely taking an abundant loss on the sale. To be more specific, Nokia bought Withings two years ago for $191 million, before rebranding the startup’s products. That includes a smart scale, and various fitness tracker watches as part of Nokia new “Digital Health” business in 2017.
However, the rebadged Withings products apparently weren’t making enough profit for the Finnish giant. In October 2017, the company published a write-down of $164 million on the assets. Then came the launch of a strategic review of the division (February 2018) with an internal memo showing that execs thought there was “no path” for the line to become “a meaningful part” of Nokia. All this devasting news happened in the company’s first-quarter earnings this year.
Besides, the Digital Health business brought in just $20 million in revenue, compared to net sales of $5.9 billion for the rest of Nokia. As the company noted in a press conference, selling Digital Health back to Carreel fits Nokia’s new motto: becoming primarily a business-to-business/licensing company. That also means getting out of any consumer markets while concentrating on selling telecommunication hardware; as well as authorizing its broad franchises.
Nokia’s Digital Health business to come to an end
Nokia says the sale is expected to complete by the end of the second quarter this year, while the future of the Withings brand is unknown.