Nokia is paying 170 million euros (US$191 million) to acquire French fitness gadgets company Withings in a bid to get into the digital health market.
For the Espoo, Finland company, which sold its handset business to Microsoft two years ago, and has been since mainly in the area of selling telecom equipment, the acquisition marks a strong push into connected healthcare and home products, ranging from activity trackers, weighing scales, thermometers, blood pressure monitors, and home and baby monitors.
Nokia's brand, which is still well-regarded in many consumer markets, may aid the company as it enters new segments and starts what it describes as a "new chapter."
"With this acquisition, Nokia is strengthening its position in the Internet of Things in a way that leverages the power of our trusted brand, fits with our company purpose of expanding the human possibilities of the connected world, and puts us at the heart of a very large addressable market where we can make a meaningful difference in peoples' lives," Nokia President and CEO Rajeev Suri said Tuesday.
The cash transaction is expected to close in the early part of the third quarter of this year, subject to regulatory approvals and customary closing conditions. After the acquisition Withings, with about 200 employees, will be part of the Nokia Technologies advanced technology and licensing business, which was set up in 2014 to leverage Nokia's brand and patents, and is also charged with licensing the Nokia brand to consumer device makers.
Nokia Technologies ventured into the virtual reality market in November 2015 with a VR camera targeted at professional content creators.
Withings' Activité Steel is a smartwatch that tracks various health parameters and synchronizes the information to the user's app to give in-depth metrics and even personal coaching. The company also offers a home security device with video capabilities that can be linked to a smartphone or smartwatch, and a weighing scale that posts and analyzes information on an app on the smartphone.
The products "help you understand how your body responds to activity and changes — the impact your activity is having on your body temperature, your weight, your blood pressure and your heart. And they do it with such a beautiful design that you love to wear them anywhere — at work, at home, or even at the opera," wrote Ramzi Haidamus, president of Nokia Technologies in a post.
Nokia said in January it had acquired control of another telecom gear maker Alcatel-Lucent, completing a process that started last year. It said it would move quickly to combine the two companies and execute its integration plans. The company also announced in December that it sold its Here digital mapping and location services business to a consortium consisting of Audi, BMW and Daimler.