After the failure of its mobile phones, Nokia has not yet given up on its gadget business. The Finland based company announced that it has acquired Withings for $192 million in cash. The deal between the two companies is expected to close in the third quarter of this year.
Following the completion of the deal, around 200 Withings employees will join Nokia Technologies. Moreover, the products of Withings will also be included in the tech company’s portfolio. Nokia’s president, Ramzi Haidamus said that the company’s is planning move into the digital health market and will look to build a reliable brand in the segment.
Mr. Haidamus said about the acquisition: “Withings shares our vision for the future of digital health and their products are smart, well designed and already helping people live healthier lives. Combining their award-winning products and talented people with the world-class expertise and innovation of Nokia Technologies uniquely positions us to lead the next wave of innovation in digital health.”
With the acquisition of Withings, the manufacturer of health care devices, home gadgets and wearables, Nokia will be able to focus more towards Internet of Things (IoT) devices. It has already secured license agreements to make mobiles and VR cameras, as it looks to push itself into the consumer electronics market once again.
With currently no core consumer business in progress, Nokia generates majority of its revenue from patents. It has the largest portfolio of mobile phones patent, which are used by its rivals under license obtained from the company. The company is pushing further into Internet of Things (IoT) segment, which is the next big thing with products like connected door bells and smart ovens already taking everyone by storm.
Digital health market has the potential to be one of the most profitable segments in the coming years. The market has huge potential as analysts have estimated the compound annual growth rate (CAGR) of 37%. This makes digital health the fastest growing sector in health care during 2015-2020. Thus, if Nokia can tap into the market, it can provide them with a solid source of revenue for the next few years.
