Nokia to sell struggling Digital Health business back to Éric Carreel, co-founder of Withings

May 2, 2018

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Nokia today announced plans to sell its Digital Health business to Éric Carreel, co-founder and former chairman of Withings.

Nokia announced a review of strategic options for the Digital Health business in February 2018. The planned sale is part of Nokia's honed focus on becoming a business-to-business and licensing company.

 

The transaction is subject to terms agreed in the negotiations and completion of the information consultation with the Works Council of Nokia Technologies (France) SA., with the deal expected to close in late Q2 2018.

 

Digital Health's business portfolio includes consumer and enterprise products, and it manufactures and sells an ecosystem of hybrid smart watches, scales and digital health devices to consumers and enterprise partners.

 

The licensing businesses of Nokia Technologies are not affected by this announcement.

 

Source : https://www.nokia.com/en_int/news/releases/2018/05/02/nokia-enters-into-exclusive-negotiations-for-the-sale-of-its-digital-health-business

 

 

TheVerge.com - Nokia bought the digital health startup in 2016 but has failed to make serious money from the business

 

Terms for the deal have not been announced, but the Finnish tech giant is surely taking a substantial loss on the sale. Nokia bought Withings two years ago for $191 million, before rebranding the startup’s products (including a smart scale and various well-recieved fitness tracker watches) as part of its new “Digital Health” business in 2017.

 

However, the rebadged Withings products clearly weren’t making enough money for Nokia, and in October 2017 the company announced a write-down of €141 million ($164 million) on the assets. This was followed by the launch of a “strategic review” of the division this February, with an internal memo obtained by The Verge showing that execs thought there was “no path” for the business to become “a meaningful part” of Nokia.

 

All this bad news was confirmed in the company’s first quarter earnings this year. The Digital Health business bought in just €16 million ($20 million) in revenue, compared to net sales of €4.9 billion ($5.9 billion) for the rest of Nokia.

 

As the company noted in a press release, selling Digital Health back to Carreel fits Nokia’s new focus on becoming primarily a “business-to-business and licensing company.” That means getting out of any consumer markets while concentrating on selling telecommunication hardware (Nokia is the third biggest vendor after Huawei and Ericsson) and licensing its huge portfolio of patents (amassed during its time as the king of mobile in the 1990s and 2000s).

 

Nokia says the sale is expected to be completed by the end of the second quarter this year, while the future of the Withings brand is unknown.

 

 

https://www.theverge.com/2018/5/2/17310378/nokia-selling-withings-digital-health-business-eric-carreel
 

 

 

 

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