Nokia announced plans to reduce investments in the virtual reality (VR) market due to “slower than expected development”, while increasing the focus of its Technologies unit on digital health and licensing opportunities.
In a rethink of its Nokia Technologies business, which oversees patent licensing, VR, and health products, the company said it will halt development of further versions of the OZO VR camera and hardware.
The decision is expected to affect up to 310 employees, mainly in Finland, the US and UK, but Nokia said it will maintain its commitment to existing customers.
Nokia made its ambitions in VR clear in 2015 with the launch of its OZO VR cameras, but there were question marks given the devices came with a hefty price tag of around $45,000.
The company invested heavily in the imaging capabilities of its VR cameras and, partly due to the immaturity of the market at the time, the cost of the devices were on the upper scale.
With today’s announcement, and the fact competitors have developed lower-priced VR products, Nokia’s big bet looks to have somewhat failed to pay off.
The company said it would “sharpen” focus on digital health as it attempts to build on its €170 million ($200 million) acquisition of French health device maker Withings in 2016.
It did not elaborate on its plans beyond stating it wants to “have larger impact with consumers and the medical community” through a more focused and agile digital health business.
Nokia added it would leave its “successful” patent licensing business untouched.
In a statement, Gregory Lee, president of Nokia Technologies, said the unit “is at a point where, with the right focus on investments, we can meaningfully grow our footprint in the digital health market and we must seize that opportunity”.