Nokia Buys Into Digital Health

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Nokia on Tuesday announced plans to purchase Withings for US$192 million in cash as part of its move into the healthcare devices arena.

The deal is expected to close in early Q3, and Withings will become part of the Nokia Technologies business.

"We have said consistently that digital health was an area of strategic interest to Nokia, and we are now taking concrete action to tap the opportunity in this large and important market," Nokia CEO Rajeev Suri said.

The deal will strengthen the company's position in the Internet of Things market, he said.

Healthcare is expected to be one of the largest vertical IoT markets, and mobile health, with a compound annual growth rate of 37 percent, will be the fastest growing healthcare segment through 2020, Nokia disclosed.

Withings' products include activity trackers, scales, thermometers, and blood pressure, home and baby monitors that run on its digital health platform and have an ecosystem of more than 100 compatible apps.

The company "has a well-established presence in the mobile health space born of relatively early entry into the activity tracking and smart scales market," noted Jonathan Collins, a principal analyst at ABI Research.

"Ongoing development of a range of innovative offerings ... has extended the reach of the company within m-health as well as the range of m-health devices themselves," he told the E-Commerce Times.

Nokia "has chosen a company that has certainly showed potential and that could benefit from greater financial support," Collins said.

The IoT healthcare market "is the biggest growth market over the next seven years in terms of revenue," pointed out Laura DiDio, a research director at Strategy Analytics.

Healthcare is bigger than the other two major markets for IoT -- the financial and industrial sectors, she told the E-Commerce Times. It "affects everybody and has a big impact in both the consumer and enterprise space in IoT."

Further, healthcare in IoT "has a wide swath of applications ranging from wearables to predictive analysis" and enables research in various fields, DiDio said. It "impacts and intersects other verticals, including insurance and biopharma."

Nokia "has 19 percent of the 3,000 patents considered essential to 4G LTE tech and is the leader there," DiDio said. The company has 16,000 patents issued and pending in the United States and "another 20,000 outside of the U.S., the majority in Europe."

Its holds patents related to WiFi and older 2G and 3G technologies such as GSM, GPRS, Edge and W-CDMA, on which it has a stranglehold, she pointed out.

Now that it has sold off its handset business to Microsoft, Nokia can "monetize the communications patents they have and can charge other people royalties if they don't use them internally," DiDio noted.

The company is "sitting on King Solomon's mine, and a lot of people are going to overlook that," she added. "The gadgets will be great, but they've also got this treasure trove of patents."

Nokia will have to take on Google, Microsoft and Apple, all of which have a presence in the healthcare field, as well as Fitbit and other makers of wearable devices for the fitness and healthcare fields.

Microsoft Research has its Medical Devices Group, which is developing sensors and sensor technologies and combining them with machine learning and signal processing technologies. It also offers Windows 10 IoT Core for medical devices.

Google X earlier this year unveiled a health tracking band. It's also working on smart contact lenses. Several other healthcare technologies were under development at Google that may have been handed over to parent company Alphabet.

Apple has been hiring medical tech talent since 2014 and in March unveiled its CareKit health tracking platform. The company might make a regulated medical device, CEO Tim Cook has indicated.

"Nokia's ability to push into the space alongside larger rivals will require significant investment and commitment," ABI's Collins said.

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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