A week after Nokia announced it would conduct a strategic review of its Digital Health arm, a leaked memo revealed the company doesn’t see a future for the business, Reuters reported.
The news outlet viewed an internal note from Nokia chief strategy officer Kathrin Buvac to employees, in which she reported the Digital Health business had “struggled to scale and meet its growth expectations”. She added Nokia doesn’t “see a path” for Digital Health to become a “meaningful part” of the company.
Digital Health and digital media contributed €52 million to Nokia’s total sales of €23.2 billion in 2017.
Nokia refused to comment specifically on the memo, but told The Verge the outcome of its strategic review is not “preordained”.
The company’s focus on Digital Health was part of a diversification strategy meant to help offset declines in its network equipment business. In 2016, Nokia sought to bolster the unit with the acquisition of wearables company Withings. But in Q3 2017, Nokia was forced to book an impairment charge of €141 million and rework its outlook for the Digital Health business after it failed to meet expectations.