In a leaked memo, Nokia has announced that a strategic review of its digital health business has begun.
The note, obtained by The Verge, comes from chief strategy officer Kathrin Buvac and comes as a shock to some within the company as the division — essentially the acquisition of French startup Withings — is only 22 months old.
Buvac reportedly wrote that the business was one of the “bets” that hasn’t turned up the best results for the company.
We have a number of incubation businesses across Nokia which we run as internal start-ups. Solve a problem, place a bet, build a product, insert yourself into the market, gauge your progress, learn from your mistakes, decide next steps. Our Digital Health business is one of those bets we have made, and certainly we have had some early success since we integrated Withings into Nokia. The Steel HR watch is a fantastic piece of technology and the reception of Nokia Sleep at this year’s Consumer Electronics Show was very encouraging. However, rather than only falling in love with our technology, we must be honest with ourselves. 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.
Nokia’s mainstay businesses in telecommunications and automation have benefited from digital health being around, the executive notes, saying that “failing fast isn’t failure, it is accelerated learning.” In this case, users have been reporting a continually degraded experience with updates to the software of their devices. One of the other failing ventures at Nokia was in virtual reality with its OZO division having cut hundreds of jobs. However, if the Finnish firm decides to drop digital health, its only consumer-facing business will be in smartphones — and even that’s operated by a licensee, albeit a successful one.
The company would not comment on the veracity of the memo, but confirmed that a strategic review was underway, saying that “there is no preordained outcome.”