After cashing out of the cell phone business six years ago, Finnish telecommunications and information technology company Nokia Corp. has been seeking new opportunities.
And a move the Helsinki-based company, once one of the world’s biggest manufacturers of cell phones, made last week suggests one area of focus is digital healthcare. On Thursday, Nokia announced plans to acquire French consumer electronics and wearable device manufacturer Withings SA for 170 million euros ($196 million) in cash.
The deal is expected to close in the third quarter. “We have said consistently that digital health was an area of strategic interest to Nokia, and we are now taking concrete action to tap the opportunity in this large and important market,” says Nokia CEO Rajeev Suri. “With this acquisition, Nokia is strengthening its position in the Internet of Things in a way that leverages the power of our brand and puts us at the heart of a very large addressable market.”
Withings, founded in 2008, has been manufacturing various wearable and wireless health and wellness devices since 2009. Withings products include an activity tracker, watches, wireless blood pressure monitors and weight scales and thermometers. Withings also has a business unit with expertise in mobile and cloud-based health data collection and analysis. Using its wearables hardware and data collection services, Withings builds health and wellness portals for tracking employee fitness. Withings’ clients include drug maker Norvartis International AG, business software developer SAP SE and computer, data storage and cloud computer services company EMC Corp.
“We’re excited to join Nokia to help bring our vision of connected health to more people around the world,” says Withings CEO Cédric Hutchings.
Nokia currently develops large-scale telecommunication infrastructure, and technology development and licensing for several markets, the company says. The company was in the cell phone manufacturing business until April 2014 when it sold its cell phone business to Microsoft Corp. in a deal valued at 5.44 billion euro (US $6.27 billion). Since the sale of its mobile phone business, Nokia has focused mainly on its telecommunications infrastructure business and in January, Nokia acquired French telecommunications company Alcatel-Lucent to grow its wireless technology and services business in a stock deal valued at 15.60 billion euro (US $17.98 billion).
The acquisition of Withings gives Nokia a foothold in wearables and mobile and digital healthcare. In a new report, healthcare technology research firm Tractica forecasts that shipments of health-related wearables will grow to as many as 97.6 million units by 2021 from an estimated one million units in 2015. The types of wearables being manufactured and shipped include fitness trackers and smart watches with health applications, to web-enabled wearable patches, pain management devices and other wrist devices and monitors. The global market for wearable devices in healthcare also will generate substantial annual sales reaching an estimated $17.8 billion in 2021 from an estimated $105.3 million in 2015.
When the deal is complete Withings will become a part of Nokia’s technologies business unit. “Withings shares our vision for the future of digital health and their products are smart, well designed and already helping people live healthier lives,” says Nokia Technologies president Ramzi Haidamus.
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