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Nokia wants to acquire Withings as part of push into Digital Health segment (update: done deal!)
Update (June 1st):
While Nokia’s deal to acquire Withings wasn’t expected to close until much later in the year, it’s now complete ahead of schedule. 200 employees from Withings will now join Nokia as part of the acquisition and on June 9th Nokia is expected to showcase some of its future products in the “digital health’ space.
Original (April 26th):
Nokia. The name, the legacy, the debate. Perhaps no other European tech company is as synonymous with the mobile segment than the one situated in Espoo, Finland. In its post mobile-making world however, the former industry titan has taken a far less visible role in the market. One such effort, last year’s Nokia N1 tablet was actually just a licensing deal wherein the company allowed a Chinese manufacture to make use of its famous brand name. And despite some devious pranks that many would love to see fill to fruition, the rumor mill seems to be coming up empty when it comes to the company’s next big thing.
Today that may be about to change, for Nokia has just announced plans to acquire the French company, Withings S.A., a specialist in digital health products and services, for EUR 170 million (roughly $191 million USD). Rajeev Suri, president and CEO of Nokia, had the following comments to offer:
We have said consistently that digital health was an area of strategic interest to Nokia, and we are now taking concrete action to tap the opportunity in this large and important market…With this acquisition, Nokia is strengthening its position in the Internet of Things in a way that leverages the power of our trusted brand, fits with our company purpose of expanding the human possibilities of the connected world, and puts us at the heart of a very large addressable market where we can make a meaningful difference in peoples’ lives.
The company’s press release specifically calls out two major forms of global health epidemics: cardiovascular disease, stating that it is the world’s leading cause of death with over one billion adults living with uncontrolled hypertension (high blood pressure), and diabetes, which affects more than one in every twelve adults around the world. Nokia believes that heathcare is going to be “one of the largest vertical markets in the Internet of Things, with analysts forecasting that mobile health, with a CAGR of 37%, will be the fastest growing health care segment from 2015-2020.”
As a result, Ramzi Haidamus, president of Nokia Technologies, feels that
Withings shares our vision for the future of digital health and their products are smart, well designed and already helping people live healthier lives. Combining their award-winning products and talented people with the world-class expertise and innovation of Nokia Technologies uniquely positions us to lead the next wave of innovation in digital health.
In addition, a statement from Withings was also included, courtesy of CEO Cédric Hutchings:
Since we started Withings, our passion has been in empowering people to track their lifestyle and improve their health and wellbeing. We’re excited to join Nokia to help bring our vision of connected health to more people around the world.
The acquisition is expected to close in Q3 of this year, assuming everything pans out.
A “strange” strategy or a solid solution?
For those who have long waited for a Nokia-made Android smartphone (and not that one), today’s news is no doubt going to sting a bit. Especially for those who are not interested in smartwatches or wearables on the whole, Nokia’s major decision to purchase Withings may seem like money that could have been better spent elsewhere.
Since Microsoft’s purchase of the company’s mobile division however, the competition has only intensified in an increasingly crowded marketplace. The Wall Street Journal estimated last year that there were no less than 1000 different OEMs making smartphones in the world. Adding to the issue is the fact that companies like OBI Worldphone have made products that, for some, channel the “spirit” of Nokia’s own.
All of this makes it increasingly difficult for the Finnish company to have a clear-cut, viable business plan in the mobile market. On the other hand, with smartphones becoming ever more affordable, with their abilities growing, and with wearable tech expanding, getting in on the digital health revolution is a decidedly solid and seemingly secure source of income.
With the patents, talent, and potential that Nokia has, coupled with the established and reliable products Withings is already producing, there stands to be a great benefit to patients and consumers the world over. As the Internet of Things starts to become more of a reality and less of a future dream, decisions like this will allow Nokia to remain relevant than ever before.
Today represents a bold new step in the future of Nokia, one that will no doubt come with mixed reactions. Given that the company is over 150 years old, it also represents a sense of assurance for another 150.
We want to hear what you think. Are you bummed out by this news? Thrilled? Have you owned a Withings watch before and can offer some insight into your experience with the brand or product? Please share your thoughts with us and the Android Authority community!