Leaked memo suggests Nokia's health business is unhealthy
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.
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.
Comments
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?
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.
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?!?
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
I will never forget how the board of directors allowed a Microsoft plant to decimate their company. Stupid doesn’t cover it.
A typical rookie mistake.
No watch shop or jeweller will touch it.
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...
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?