Nokia is reportedly moving toward selling its struggling health business, though there's still no word on how much the division may cost. Recent reports suggest that Nest, the smart home subsidiary of Alphabet that was recently re-absorbed by Google, is one of the interested companies that seek to acquire the business, in addition to other suitors from France and other parts of the world.
Last February, the Finnish tech giant began evaluating its digital health business which manufactures wearables and smart scales, though at that time Nokia said the move did not necessarily mean that the company was planning to divest it. The digital health unit of Nokia was born out of the company's acquisition of Withings for €170 million in 2016, and Nokia Health largely consists of the assets from the former French firm. Nokia Health apparently stagnated in the years following the Withings acquisition. In fact, Nokia's financial report for the fiscal year 2017 revealed a write-down of €141 million, or approximately $175.9 million, on its goodwill investment over the third quarter of the period. Since's Nokia completed the acquisition of Withings two years ago, the health division failed to produce a considerable number of successful consumer-facing health products. This January, Nokia's health and fitness divisions reportedly shifted their focus from creating new commercial products to improving their existing offerings.
Shortly after the strategic review was announced, a leaked memo revealed that Nokia is considering abandoning the consumer health space altogether, with the company's chief strategy officer Kathrin Buvac telling employees that the digital health division no longer meets its targets, having concluded she doesn't think the health business will still be able to play a significant role as a part of Nokia going forward. However, she explained that Nokia will maintain its footprint in the consumer side of the industry in the form of brand licensing and co-development partnerships, just like how it presently operates in the smartphone sector where it's partnered with HMD Global.