Nokia’s Digital Health division sells digital fitness trackers
Nokia (NOK) is selling its Digital Health segment two years after creating the division to garner revenues from the digital health market. The global digital health market is poised to grow to $536.6 billion by 2025 from $196.3 billion in 2017, according to Transparency Market Research (or TMR).
The enormous revenue opportunity in the digital health market is attracting more players to the sector, with Apple, Fitbit (FIT), and Xiaomi among the companies competing for digital health revenues. Apple and Fitbit sell wearable devices that enable people to monitor their heart rates and other health-related metrics. Nokia also sells fitness and health trackers through its Digital Health division, which is now being offloaded.
Nokia’s Digital Health business struggled for growth
After reviewing its strategic options for the business for about two months, Nokia decided to offload its Digital Health division. It seems the review showed Nokia that there was no clear path to meaningful growth or profitability in the business. The unit generated 16.0 million euros in revenues in the first quarter, which was flat from a year earlier.
Nokia’s Digital Health division primarily consisted of Withings, the maker of digital fitness devices that it acquired in 2016 for ~$200.0 million. Nokia is selling its Digital Health business to a co-founder of Withings. Samsung (SSNLF) and Google (GOOGL) also explored acquiring this segment, according to TechCrunch.
Nokia aims to minimize losses
The disposal of its Digital Health business marks another step by Nokia to minimize its risks. Last year, Nokia announced it was pulling out of the virtual reality market because it felt the market was developing more slowly than expected. In 2014, Nokia sold its phone-making business to Microsoft (MSFT) at a time when it had fallen behind Apple and Samsung in the smartphone market.