After two year of running a digital health division, Nokia has decided to sell the business back to its owner as the health business struggled to scale and meet its growth expectations, the company said .
Nokia bought Withings, a French startup providing wearables and digital health devices and services, in 2016 for €170 million.
When Nokia started to think about selling it again, it was reported that Samsung, Google’s Nest and other French companies are interested in this deal. At the end, Nokia said it will sell Withings to Eric Carreel, co-founder and former chairman of Withings.
The digital health business’ products include smart scales, heart and activity monitor, sleep tracker and smart thermometers.
Nokia rebranded Withings as Nokia Digital Health in February 2017. Nokia invested time and effort to bolster the division. However, it just didn’t make enough money for Nokia.
Nokia has been struggling with the digital health business it bought. The division generated €52 million in revenues in 2017, while the company posted annual sales of €23.2 billion.
“In its entirety, our Digital Health business has struggled to scale and meet its growth expectations. Currently, we don’t see a path for it to become a meaningful part of a company as large as Nokia,” wrote Kathrin Buvac, chief strategy officer in Nokia, in a memo to employees, according to media sources.
Nokia didn’t indicate the amount of the deal, but it could be less than the price it bought for €170 million. The deal should be complete in the second quarter of 2018. After that, it’s not yet clear what will happen with the Withings brand.
After this sell-off, Nokia will focus on becoming primarily a “business-to-business and licensing company,” the finish company said. Nokia is the third largest vendor in telecommunication hardware in the world, and it also licenses a huge portfolio of mobile technology patents.