Why Nokia Technologies acquired digital health company Withings

By Jonah Comstock
01:12 pm

Ramzi Haidamus, President of Nokia Technologies, describes the company’s pending $191 million acquisition of Withings as a “reverse takeover”.

“Nokia is paying the bill, but it’s really Cedric [Hutchings, CEO of Withings] and his team that will come into Nokia and run the whole show,” Haidamus told MobiHealthNews. “All our digital health efforts inside the company will report to Cedric and his team and he will determine the strategy and the product roadmap moving forward.”

For Withings, that means gradually incorporating Nokia assets into the product suite. But for the immediate future, it’s all about scale.

“It’s about adding resources and accelerating on the product roadmap,” Hutchings told MobiHealthNews. “It’s about a spotlight on our product, and awareness and being a brighter, shinier light to the rest of the world. And it’s about building a robust global operation to make sure that we tap the markets that are very much undertapped — and I’ll speak about the US here — or markets that are not tapped at all and we are not pursuing, regions of the world we now have the means to go after much more aggressively. It’s about marketing and global operations.”

But one big lingering question about the acquisition — which seemed to take many industry insiders by surprise — is how did Nokia end up in digital health to begin with? That story goes back to Microsoft’s acquisition of Nokia’s mobile device business in 2014.

“When I joined the company, we had just sold the mobile phone business and what was left was 600 engineers,” Haidamus told MobiHealthNews. “There was no company. There was no strategy. There was no business. There were no business executives at all except the one executive running the patent licensing business. There was nothing other than a group of engineers and dozens of experiments in the labs that Nokia had already been playing around with in the mobile business. So I took my first 90 days upon myself to look through every single project and decide, of these projects, what would be a product that we can bring to market?”

His criteria were twofold: he was looking for a market where the timing was right, with an established industry but a lot of room for growth, and he was looking for something his engineers were passionate about. Two projects fit the bill: The Vozo VR camera, and a couple of wrist-worn health monitoring projects that he declined to discuss in detail.

“All I can tell you is that it’s wrist-related products plus plus some sleep-monitoring products,” he said. “They were all doing beautifully, I’m so glad we continued to invest, because I know Cedric will pick good pieces of that technology [to develop]. Most of them were sleep-related, or heart rate variability, as well as stress — just about anything you can measure from the wrist.”

Haidamus also noted that market research showed Nokia’s brand was well-suited for digital health.

“I was doing market research on our brand to see if our brand would be well received in the digital health space,” he said, “and indeed the top attributes of the brand were trustworthiness, reliability, dependability, and in fact, even if you were to say that the brand itself was associated with an older demographic, that’s even more perfect, because older demographics are looking for digital health products more so than the 20-somethings who [believe they] are never going to die.”

Once he’d settled on digital health as a focus area, Withings was a compelling choice for the acquisition because their visions aligned, Haidamus said. Both were interested in devices that had the regulatory clearance and robustness for clinical use, but were designed for and marketed to consumers. And both had a broad, holistic view of health monitoring.

“The more we looked, the more we zeroed in on Withings, a company that has an elegant design that looks like a Nokia product,” Haidamus said. “It has a trusted brand, simple to use, reliable, and looks at health holistically. Meaning we’re not just tracking your steps, not just tracking activity, but we’re telling you if your health is on the right track or not. By doing not only personal but environmental measurement. With products that measure air quality, even all the way up to security cameras to make sure you live in a secure environment. The whole idea of living longer hinges on a strong social fabric and a safe environment to live in, not just ‘do you have the right blood pressure?’”

Haidamus and Hutchings aren’t yet sure how Withings devices will be branded going forward — Nokia is more generally well known, especially globally, whereas Withings has more cache in digital health circles. Nokia has begun market research into the question and hopes to have an answer when the acquisition is expected to complete -- in Q3. 

The whole team from Withings is staying on board and continuing to operate out of their current offices in Boston, Paris, and Hong Kong. No one at Nokia is being let go as a result of the deal either. In fact, Haidamus hopes to expand the team with additional outside talent as the new company defines its mission. 

Hutchings thinks the added resources of Nokia will help Withings boost its market presence considerably.

“Really the vision and the way to achieve the vision was an obvious match,” he said. “As a founder of the company, it’s important beyond setting the vision to make sure we get the right resources to outpace the train of the market itself. The good news is there’s quite clear evidence there’s an acceleration of the digital health market, both for the consumer but also in patient care and healthcare. It was a tremendous opportunity to shift gears and provide overnight the right resources to be the global leader of this market.”


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