Nokia May Close Fractured Digital Health & Wearables Unit
Nokia has announced it’s conducting a “strategic review” of its struggling Digital Health business – which includes its smartwatch, fitness tracker and smart scale divisions.
Announced alongside the strategic review, Nokia revealed it’s also cutting over 400 jobs from HQ.
The Finnish company states the review “may or may not result in any transaction or other changes” – however it could be an early warning for its struggling wearables division.
The company first purchased French-based wearables company, Withings, in 2016 for US$191 million in cash, which was folded into Nokia and renamed ‘Digital Health’.
In the third quarter of 2017, Nokia wrote down over US$175 million of goodwill in Digital Health – an indication it significantly overestimated the value of assets.
Nokia’s redesign of the Withings health app faced considerable backlash, and the company also moved to withdraw many ‘techy’ features from its smart scales.
Despite the success of Apple’s smartwatch, eMarketer’s latest research forecasts the wearables market will soon decline, only growing 11.9% this year, and further slipping to single digits in years after.
The news may signify further pain at Nokia – the company recently terminated its Ozo VR camera project, resulting in the termination of over 300 jobs.
Outside of consumer electronics, Nokia’s enterprise sales remain strong.