Nokia Corp (ADR) (NOK) Focuses On Consumers Electronics to Come Back With a Bang

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Nokia Corp (ADR) (NYSE:NOK) is planning for a mega comeback after years on the sidelines. Up until now, the Finish Company has over-relied on its networking and telecommunications business to drive growth. In the recent past however, the company has been on an acquisition spree as it looks to diversify its core business.

The consumer electronics market is one that Nokia has set sights on, as it looks to become a powerhouse in the world of Internet of Things. Having developed a virtual reality camera for filmmaking, the company is now looking to bolster its hardware business with fitness tracking devices.

Nokia’s Consumer Electronics Prospects

Last year, Nokia Corp (ADR) (NYSE:NOK) set aside $350 million through its venture capital subsidiary to be used in the acquisition of companies embedded in the internet of things. One of these companies is Withings that the company acquired for $191 million to expand its wings into the digital health industry.

The smart health care industry according to estimates will be worth $233.3 billion by 2020. Given everything is moving to the cloud, Nokia’s prospects on this front look brighter than ever with the latest acquisition.

Betting Big on Smart health Gadgets

It is unclear whether Nokia Corp (ADR) (NYSE:NOK) is considering entering the phone business, an area it once dominated in the early 2000’s. Amidst the uncertainty, one thing is clear; the company’s future lies in the smart health business. It is an area of specialization that could ignite its consumer electronics prospects given what is at stake.

A Statista research values the mobile based and wireless health gadgets at $55.9 billion and $103.3 billion. Getting a piece of the pie on these two lucrative categories should help Nokia offset weakness in its other core businesses.

Additional Revenue Up For Grabs

Withings is all but set to spearhead Nokia Corp (ADR) (NYSE:NOK) prospects when it comes to consumer electronics. The company boasts of a vast portfolio of fitness wristbands and smartwatches compatible with both Android and iOS devices. Wireless weighing scales, blood pressure monitors, camera/air quality monitors and remote baby monitors are some of the other gadgets the company is selling.

Focusing on fitness and health monitoring is no longer a gamble for Nokia Corp (ADR) (NYSE:NOK) given the amount of revenue it could generate from the same. Fitness band and watches could bring in an additional $500 million in revenue, which should help bolster the company’s earnings.

Nokia vs. Apple

Nokia is not in any way looking to rival Fitbit even as it continues to bet big on health monitoring gadgets. Profiting from managed healthcare services is the company’s primary goal as it moves to create an alternative to Apple Inc. (NASDAQ:AAPL)’s Healthkit service.

WellCare, which is Nokia’s answer to Healthkit, should be a force to reckon with in a few years’ time. Withings expertise on mobile/cloud based health data collection and analysis should make the platform more desirable and competitive going forward. Nokia has also acquired Nakina systems to help safeguard any medical data that the platform handles.

Conclusion

The potential of consumer electronics business could be the catalysts Nokia shares needed to trade higher given what is at stake in terms of returns. Venturing more into healthcare products should reduce the Finish Company’s reliance on 4G LTE networks for revenues going forward.

Focusing more on products that people use on a daily basis should help Nokia Corp (ADR) (NYSE:NOK) offset weakness in its networking business that is under immense pressure from Chinese firms. Even though an entry into the phone business could be in the cards, focusing on IoT and consumer electronics should take the company to new heights.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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