Leaked memo suggests Nokia's health business is unhealthy

Posted:
in Apple Watch edited February 20
Less than two years after Nokia bought health and fitness gear maker Withings for $192 million, the major investment appears to be problematic for the Finnish company, as a new memo suggests its health business may not last much longer.




The leaked note, obtained by The Verge, featured Nokia Chief Strategy Officer Kathrin Buvac telling employees that the company does not see a way for the business "to become a meaningful part of a company as large as Nokia."

The acquisition of Withings allowed Nokia to step into the wearable devices market, where it competes with the likes of the Apple Watch.




Apple and Nokia also found themselves at odds with each other in court over dueling patent infringement allegations. Those issues were eventually resolved last May, which led to Apple resuming sales of Nokia health accessories at its stores, but that apparently was not enough for the business unit to find the kind of success Nokia seeks.

"Rather than only falling in love with our technology, we must be honest with ourselves," Buvac wrote in her rather ominous sounding memo.

Nokia announced last fall that it would write down $164 million U.S. on the purchase of Withings, revealing it overpaid for the health device maker. In her memo, Buvac said Nokia plans to "focus and transform" itself into a business-to-business licensing company in telecommunications and industrial automation, focusing less on consumer products.
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Comments

  • Reply 1 of 23
    Hope the withings founders buy back their company and continue to develop health accessories. Forget the watch, though! But scales, blood pressure, thermometers and sleep monitors are great companions to the Apple health eco system. 
    kitatitarthurbabshankdacharwatto_cobraJWSCcaladanian
  • Reply 2 of 23
    I have a Withings Activité watch and I like its stylishness, endurance and beauty. However, if Nokia kills what used to be Withings, I'm ready to ditch it for the Apple Watch. But what about the Thermo (really great product!), Aura and smart scale? Are they destined for slow death like Pebble Time? Or are they going to die immediately? I wonder if there is any other company with such high quality and homekit compatible products. Honestly, I don't understand Nokia. It used to be #1 mobile phones company. Now it makes low-end androids and android iPad knockoffs. And because of some business whim it decides to buy perfectly working creative company (having absolutely different scope) just to kill it few months later? Why?
    watto_cobra
  • Reply 3 of 23
    mrakoplas said:
    Honestly, I don't understand Nokia. It used to be #1 mobile phones company. Now it makes low-end androids and android iPad knockoffs. And because of some business whim it decides to buy perfectly working creative company (having absolutely different scope) just to kill it few months later? Why?
    That's lazy upper management trying to buy their way into promising profitable markets. It almost invariably ends with a lot of cash being burnt to ashes, and unfortunately, some good products/ideas being shit-canned!
    watto_cobrajbdragonwillcropointJWSCcaladanianjony0
  • Reply 4 of 23

    The leaked note, obtained by The Verge, featured Nokia Chief Strategy Officer Kathrin Buvac telling employees that the company does not see a way for the business "to become a meaningful part of a company as large as Nokia."
    Strange -- that's exactly the sort of thing I'd expect a chief "strategy" officer to have figured out prior to dropping $164 million on a purchase. In fact it sounds like her job description. If they shut it down and write it off I'd expect a letter of resignation to go along with it.
    edited February 20 watto_cobraiCintosjbdragonJWSCcaladanianjony0
  • Reply 5 of 23

    mrakoplas said:
    Honestly, I don't understand Nokia. It used to be #1 mobile phones company. Now it makes low-end androids and android iPad knockoffs. And because of some business whim it decides to buy perfectly working creative company (having absolutely different scope) just to kill it few months later? Why?
    That's lazy upper management trying to buy their way into promising profitable markets. It almost invariably ends with a lot of cash being burnt to ashes, and unfortunately, some good products/ideas being shit-canned!
    It's amazing how much burn and waste there is in big corp. As an owner of my own small companies in the past, I had to fight tooth & nail for a micro fraction of the capital these big corps routinely burn pissing around. Any small business can tell you, getting funding, even lending that you're personally responsible for, is hard. And it's routine and normal for big companies to just blow it left & right. I suppose is the lesson here is it's easy to spend when it's not your money. Just a shame small business can't get the same sort of attitude from lenders. How many new endeavors might have been created?
    edited February 20 arthurbawatto_cobra
  • Reply 6 of 23
    oberpongo said:
    Hope the withings founders buy back their company and continue to develop health accessories. Forget the watch, though! But scales, blood pressure, thermometers and sleep monitors are great companions to the Apple health eco system. 
    My thoughts exactly. I’ve had Withings smart scale for 7years and it hasn’t missed a beat.

    I groaned when Nokia bought them out. I had all Nokia phoned before I bought the iPhone 3G as I loved their simple straightforward software and elegant hardware. Unfortunately, when more features and complexity arrived in phones, they couldn’t figure out how to keep their OS intuitive and it became a mess.

    The Nokia health app is ok but I much preferred Withings own app. Nokia don’t seem to do anything special with user interfaces now.

    As far as the Nokia brand goes, it’s permanently damaged. What’s the first thing you think of when you see NOKIA? Probably,
    -Complacent phone company who got their head knocked off by Apple and never  recovered.
    -Their forced arranged marriage to Microsoft who were as clueless as Nokia had become themselves.

    Not really positive images that make you trust  a brand and want to use their products.

    Give it up! The Nokia brand has worse than zero value now, let it die. It probably would rather die after being tampered with by MS anyway.
    arthurbawatto_cobraJWSC
  • Reply 7 of 23
    The Witherings brand was always a poor fit for Nokia.   If Nokia were to sell it off (at a steep discount) it would be good fit for Philips, which does quite well with consumer specialty devices....
    arthurbawillcropointJWSCjony0
  • Reply 8 of 23
        
    edited February 20
  • Reply 9 of 23
    Less than two years after Nokia bought health and fitness gear maker Withings for $192 million ... Nokia announced last fall that it would write down $164 million U.S. on the purchase of Withings, revealing it overpaid for the health device maker. 


    No it doesn’t mean they overpaid. It means that under their management it lost $164M in value.  That takes real skills. They should state that plainly and clearly. Lots of big corporations out there aspire to that sort of incompetence. 

    Ive got a withings scale - love it. Hope they sell this business to someone with actual ideas for bargain basement price so we get more innovation.  

    Total software updates for my scale since Nokia took over: zero. 

    Yep - do nothing with a $192M business for a few years and yep, it’ll lose value. Duh?!?
    macdiggersteveauwatto_cobraiCintosjbdragonwillcropointjony0
  • Reply 10 of 23

    Total software updates for my scale since Nokia took over: zero. 

    Oh no! You're being too harsh to poor Nokia! They worked their asses really, really hard and pushed an update to my scale just a month or so ago.

    Which REMOVED an existing feature that I bought the f'n scales for in the first place! (talking about Pulse Wave Velocity).

    So hey! They didn't just sit there doing nothing. So yeah, you're being unfair to the poor puppies… /s
    edited February 20 watto_cobraiCintosjbdragonJWSCjony0
  • Reply 11 of 23
    Rayz2016Rayz2016 Posts: 3,771member
    Nokia is becoming the poster-child for corporate f*ck ups. 

    I will never forget how the board of directors allowed a Microsoft plant to decimate their company. Stupid doesn’t cover it. 
    watto_cobrajbdragonJWSCStrangeDays
  • Reply 12 of 23
    ...allowed Nokia to step into the wearable devices market, where it competes with the likes of the Apple Watch. 

    A typical rookie mistake.
    watto_cobra
  • Reply 13 of 23
    Rayz2016Rayz2016 Posts: 3,771member
    ...allowed Nokia to step into the wearable devices market, where it competes with the likes of the Apple Watch. 

    A typical rookie mistake.
    Yes, the Withings watch was interesting until the battery runs out, which takes about a year or so. 

    No watch shop or jeweller will touch it. 
  • Reply 14 of 23
    SoliSoli Posts: 7,630member
    . . .
    edited February 21
  • Reply 15 of 23
    adm1adm1 Posts: 831member
    step 1; buy promising health tech company, step 2; rebrand all the devices, step 3; do nothing else, step 4; wonder why it's not making money. What a team they have there! /s
    JWSCcaladanian
  • Reply 16 of 23
    No surprise. Corporate leaders don’t know anything about running a business that makes stuff — they’re glorified banks moving money around. That’s what business schools teach.


  • Reply 17 of 23
    jbdragonjbdragon Posts: 1,741member
    This Health Market is not going to be some huge, fast-growing market.  You buy a Scale, you're not going to replace it every couple years.  I still have my Original Withings Scale and it still works great.  It does everything I need it to do.  Why upgrade?  Same thing with other things they sell.  Well, Nokia sells.  It's sure not like the Smartphone Market.  Do they not realize this?
  • Reply 18 of 23
    Rayz2016 said:
    ...allowed Nokia to step into the wearable devices market, where it competes with the likes of the Apple Watch. 

    A typical rookie mistake.
    Yes, the Withings watch was interesting until the battery runs out, which takes about a year or so. 

    No watch shop or jeweller will touch it. 
    Just buy a good brand Lithium CR2025 battery on Amazon for a couple of dollars and change it yourself using the provided tool. You will see, it is a 5 minute job, at max. 

    I got a Steel HR after the Pop, I love this watch. A monthly charge and it does the job with style.

    Now I am afraid that we will soon be good to throw all our Withings stuff to the garbage. Thank you very much Nokia...
  • Reply 19 of 23
    JWSCJWSC Posts: 102member
    Rayz2016 said:
    Nokia is becoming the poster-child for corporate f*ck ups. 

    I will never forget how the board of directors allowed a Microsoft plant to decimate their company. Stupid doesn’t cover it. 

    According to the OECD, Finland ranks among the top performers for reading, science and math.

    Makes one wonder if Nokia’s hiring practices were based upon scholarly merit or patronage?

  • Reply 20 of 23
    maestro64maestro64 Posts: 4,140member
    as others have said, hope they sell it off verse kill the products, we have their scale and works great with the phone and the App change was not real desirable. Make is bit hard to look at all your data, everyone is going to these fluffy minimalist views.
    willcropoint
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