Nokia enters the digital health realm with $192 million acquisition of France’s Withings
Nokia has today announced that it is acquiring Withings, the company behind a range of connected health products, including watches, fitness bands, sleep-trackers, thermometers, and scales.
Founded in 2008, Withings had raised a little more than $ 30 million in equity funding and claims 200 employees across Paris, Cambridge (U.S.), and Hong Kong. Today’s acquisition values the French startup at €170 million ($ 192 million).
Since offloading its Here mapping unit and shifting its mobile phone division to Microsoft, Nokia has consisted of two core divisions — Nokia Networks, a broadband network infrastructure business, and Nokia Technologies, a wing that aims to keep the brand alive in the public realm. This includes its virtual reality (VR) Ozo camera, and just yesterday the Finnish company announced a tie-up to power Disney’s push into VR. Now, Withings suite of products will be added to the Nokia Technologies arm, which signals an interesting new direction for a company once synonymous with mobile phones.
“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,” said Rajeev Suri, president and CEO of Nokia, in a press release. “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.”
It’s true that 2016 could go down as the year the Internet of Things (IoT) really came to fruition, with everything from smart ovens, connected doorbells, and even beds coming to the fore. Nokia has clearly taken note. At Mobile World Congress back in February, the company announced a trio of tidbits centered around 5G, security, and IoT, the latter of which consisted of a fresh $ 350 million fund to plow into new IoT projects.
“We’ve been impressed with the plans the Nokia team has shared with us both for preventive health and patient care,” said Cédric Hutchings, Withings CEO, in a statement. “As soon as we close the deal, we can start working together to determine our way forward.” The cash acquisition is expected to close in Q3, 2016.
Fears that this may somehow derail Withings’ in the consumer fitness realm were also addressed, with Hutchings adding that “our applications and products will continue to work in the same way.”
The acquisition is notable for a number of reasons. That Withings has sold to another European company, rather than a big Silicon Valley entity, will likely please many across the region. But more than that, this signals Nokia’s resurgence as a consumer product company. While the Nokia brand still lingers on some new phones, courtesy of Microsoft, it has largely been dead in the water for some time, particularly in Western markets.
Nokia hasn’t ruled out an official return to the smartphone realm, at least in some capacity, though that would be more likely through a brand-licensing arrangement, with Nokia taking on the design and outsourcing the manufacturing and marketing. That could still be a ways off, if it happens at all, but for now we do know that Nokia will be making a splash in the consumer-focused hardware realm at some point this year.