Finnish company Nokia may be stepping out of the spotlight in the consumer health space, according to a leaked internal memo. In the memo, chief strategy officer Kathrin Buvac tells employees that the digital health business, including the company's tie-up with Withings, is simply not meeting its targets. Furthermore, she says that she does not think that the company's consumer health business, in its current form, can grow into a significant part of Nokia as a whole. She does go on to explain, however, that the company will still have a presence in the consumer side of the digital health space, just not as a first party. According to the memo, Nokia will apparently be working out brand licensing and co-development deals in the space, similar to how it operates in the smartphone space in conjunction with HMD Global. It is unclear what role, if any, Withings will be playing in this new way of things.
Nokia made a full acquisition of the Withings consumer health electronics brand in 2016, and has since cranked out a relatively small number of consumer-facing health products. One of those, it is worth noting, was the well-received Steel HR smartwatch. The wording of the memo leaves no doubt that some employees previously involved in Nokia's first-party consumer health efforts will be affected somehow, whether they'll be working on something else, or out of a job entirely. Likewise, it's not stated what will happen to support for existing health products.
In the same memo, Buvac tells Nokia employees that the company essentially thrives on working outside of its comfort zone, and that many of its other ventures outside of the core business have done well. She goes on to explain that the company's work in the consumer health space was not entirely without benefit in the end, as it created partnerships and contacts that can help the company in its core business and other ventures, and she mentions 5G and IoT as two prime examples. Nokia's brand faded into the background in the consumer space for a short period while the company languished in exclusivity with Microsoft on the dying Windows Phone platform, but was brought back in a big way by its tie-up with HMD Global for Android smartphones. This venture brought the company back into the top 200 consumer companies in the world, according to Buvac's memo, and there is surely reason to believe that Nokia's branding and deal-making savvy will lead it to greater success in consumer health than it's seen in the recent past with its own efforts.