Google to acquire Nokia’s smart health business
Google’s (GOOGL) Nest, a smart home company, is considering bidding for Withings, Nokia’s (NOK) smart health business. Withings has been struggling since Nokia acquired it in 2016. Apart from Google’s Nest, which is known for its smart thermostats and smoke detectors, two French companies and one non-European company have joined the race to acquire Nokia’s smart health business, according to industry sources.
Google’s Nest to expand in the smart health market
A smart home subsidiary of Google, Nest is undergoing a transition as it’s merging with Google’s hardware division. This merger is expected it to better compete with Amazon (AMZN) and Apple. An investment in Nokia’s digital health firm would be a significant step for Google, which has never manufactured health-focused products.
As a result, this deal would position Google in the health-focused smart home market. According to Global Market Insights, the global digital health market could expand at an average annual rate of 25.9% between 2016 and 2024.
Factors not favoring the deal for Google
According to industry sources, France’s government is expected to favor a French bidder for Nokia’s France-based digital health business Withings. France’s government wouldn’t have supported a sale to the US-based Google after the Facebook’s (FB) Cambridge Analytica scandal that involved a leak of private user information.
Notably, Google has significantly more information about users than Facebook through its search engine or Google Maps. The article also speculates that instead of separately bidding for Withings, Google should have invested in one of the French companies that are competing in the bidding for Nokia Health.