Nokia has acquired Withings, a French Internet of Things (IoT) and smart device manufacturer with a focus on health, for €170 ($192) million. Withings’s current range of connected health devices includes: smart scales, activity trackers, thermometers, blood pressure monitors, alarm clocks and baby monitors.
Nokia expects the deal to close in early Q3 2016.
Nokia has undergone a major transformation over the past three years. It sold its device unit to Microsoft in 2013. In 2015, it sold HERE Maps to an automotive consortium. In 2016, Nokia has merged with Alcatel Lucent. And now it has acquired a health focused IoT manufacturer.
In its golden years, Nokia built a great brand in the mobile telephone market. Since selling its device unit, Nokia made a limited return to the consumer market through its Nokia N1 Android tablets. However, the acquisition of Withings will put Nokia truly back into the consumer sector. It is not yet clear what will happen to the Withings brand, but Nokia still believes its brand holds value and has maintained trust, despite all of the calamities that ensued since Windows Phone. As part of its sale to Microsoft, Nokia agreed to not produce branded mobile devices until Q4 2016. Once the “no compete” period ends, Nokia intends to re-license its brand for mobile phones.
Withings has previously raised $34 million in venture capital funding. The acquisition should give Withings room to expand its digital health platform. Nokia, as a pioneer in the early days of the mobile industry, still holds a large number of telecommunication related patents that could help Withings develop faster, without needing to find work arounds or pay royalties for basic connectivity solutions. Withings will be part of the Digital Health sector of Nokia’s Technologies group that also includes Digital Media, Brand Licensing, and Patent Licensing.
Nokia is not the only tech company interesting in entering the digital health space. In 2014, Intel bought Basis Science, a health focused wearable device manufacturer, for $100m. In 2015, Fossil bought Misfit, a fitness tracker manufacturer, for $260 million. As big companies take a greater interest in digital health, independent digital health companies will have a lot of opportunities to exit. But with all the consolidation, it will become more difficult for smaller companies to remain independent.