Health IT

Nokia leaked memo: No path for digital health to become meaningful part of the company

The Verge, citing the memo, noted that Nokia’s chief strategy officer Kathrin Buvac told employees that “our digital health business has struggled to scale and meet its growth expectations.”

Withings devices acquired by Nokia

Although the news that Nokia was conducting a strategic review of its digital health business did not sound good for a sector the Finnish company which acquired its way into only two years ago, an internal memo obtained by The Verge added more reason for doubt about the future for digital health at Nokia.

The Verge, citing the memo, noted that Nokia’s chief strategy officer Kathrin Buvac told employees that “our digital health business has struggled to scale and meet its growth expectations.”

A Reuters report following The Verge story also noted the news service had seen the memo. Asked about the memo, a Nokia spokesperson told Reuters:  “We now need to see how the strategic review progresses – there is no pre-ordained outcome.”

The publication also noted that Nokia had overvalued Withings when it acquired the business and had to write down $164 million on the purchase of the business, according to a quarterly earnings report in October last year.

Despite the news, a Nokia spokesperson told MobiHealthNews in the wake of the strategic review announced last week that digital health products are doing well.

“During this strategic review, we are focusing our resources on delivering strong products to serve a market need and how we can meet connectivity needs of hospitals and enterprises.”

MobiHealthNews also called attention to how busy Nokia’s Twitter handle @AskNokiaHealth has been since the start of the year following a decision to cut Withing’s Body Cardio scales’ velocity measurement feature. There were concerns the company had not secured proper regulatory approval for that component, which infuriated customers.

Nokia acquired French wearables and connected health business Withings in 2016 for $192.3 million. gaining access to a product portfolio of devices such as Bluetooth-enabled blood pressure cuffs, scales, thermometer and activity trackers. Prior to the deal, Nokia Technologies launched a $350 million Internet of Things fund to target investments in digital health, connected enterprise, consumer solutions, and connected cars.

Here is a larger passage from the memo which sheds a little more light on the digital health business below:

We have a number of incubation businesses across Nokia which we run as internal start-ups. Solve a problem, place a bet, build a product, insert yourself into the market, gauge your progress, learn from your mistakes, decide next steps. Our Digital Health business is one of those bets we have made, and certainly we have had some early success since we integrated Withings into Nokia. The Steel HR watch is a fantastic piece of technology and the reception of Nokia Sleep at this year’s Consumer Electronics Show was very encouraging. However, rather than only falling in love with our technology, we must be honest with ourselves. In its entirety, our Digital Health business has struggled to scale and meet its growth expectations. Currently, we don’t see a path for it to become a meaningful part of a company as large as Nokia. Thus, we are conducting a strategic review to determine the best next steps for the business. Once we know more about possible future steps, we will inform impacted employees, as well as engage employee representatives in line with local legal requirements and practice, where needed.

…Digital Health has given us a perspective on a new sector. It has opened conversations with companies and influencers outside our core business. We have learned from this, and with a sharper focus are using that knowledge to our advantage, just as 5G and IoT opportunities are accelerating.

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