Nokia Health under strategic review. Sale of the unit possible
Nokia Corporation officially announced that the compay’s Digital Health unit, that operates inside Nokia Technologies, is put under “strategic review”. That basically means that Nokia is analyzing if the company should continue operating in the Digital Health market and how, or get out of it by selling the unit.
The most intriguing sentence in the short press review, that you can fully find here, reads: “The strategic review of the Digital Health business may or may not result in any transaction or other changes.”
I’m all in for Nokia Health and I would like it to stay a part of Nokia. In 2017, the Digital Media (OZO) and Digital Health business brought Nokia just €52 million in revenue (patents and brand licensing were responsible for €1.6 billion in revenue), and we don’t know how much the cost of operation of these units was last year. I’m sure that Nokia Health wasn’t profitable, but the presence of Nokia brand in a consumer-centric market brings up the brand value and maybe Nokia should compensate the financial loss because of the brand value it brings.
On the other hand, as I noted in an article trying to understand how the health gadgets could fit into the bigger picture, Nokia’s Digital Health unit is static, inert. All of their products are good, if not excellent, but the long wait for Steel HR, not sending review units of all of their products to as many sites they can, and limited availability cannot lead to a sales increase.
With the return of the Nokia phones, it would have been convenient for Nokia Health to sell their devices via the same sales channels (and I think they said they will do so). This means, in leading retail stores and inside carrier stores on as many markets as possible. Not to mention that it is really hard to find a review of Nokia Health product in local or global media. Most of phones are sold that way, the same can be applied to Health gadgets as well.
The more people read about Nokia Health products, the more people will be interested in buying one. Running a Twitter and Facebook account, coupled with Google Ads, isn’t enough. Consumers have sites they trust, and consumers make decisions, especially when buying non-Apple expensive stuff (like a €180 scale or €100 thermometer), after seeing if a product is worth the money.
A broader push of Health Gadgets, bundled with some Nokia phones, could increase the sales and maybe turn the financials around. I think a little more alternative media promotion, broader availability and a 15% price cut across the portfolio could turn things around fast. I mean, the hardware looks great, but if no one knows how really great it is, who is going to buy it?
What do you think about Nokia Health? Do you agree that having a whole ecosystem of products under the Nokia brand is worth the financial cost? Also, who could buy Nokia Health? Maybe HMD? Tell us your thoughts down below.