Nokia calls BS on VR

Nokia has decided the world of VR isn’t as big or as glamorous as some people claim, and will trim back its R&D funding for the tech at its Technologies division.

Perhaps a few of the executives got burnt a while back when 3D TVs were going to be the next big thing, but it isn’t going to happen again. That monstrosity might still be sitting in their living room, but there certainly won’t be any VR gear to accompany it. Unfortunately this does not only mean less cash, but 310 staff to be let go.

“Nokia Technologies is at a point where, with the right focus and investments, we can meaningfully grow our footprint in the digital health market, and we must seize that opportunity,” said Gregory Lee, President of Nokia Technologies. “While necessary, the changes will also affect our employees, and as a responsible company we are committed to providing the needed support to those affected.”

It is certainly a fine line to walk. There have been a few false dawns in recent years, but trying to pick them out of the euphoria is a tricky task. Nokia doesn’t want to burn cash, but at the same time these executives will be praying the VR fad does not move over into the mega trend category. It is a question of which wrong would you rather be; wrong and invest money in a failed technology, or wrong and miss out on what could be a payoff.

The ‘optimized’ budget for VR (excellent PR spin work from the Nokia team) will allow for increased investments in the digital health arena. Last year, Nokia announced it would be acquiring health and fitness focused gadget maker Withings for €170 million, which will get the lion’s share of the attention from here onwards.

We’re still not convinced the VR world is going to be anything more than a niche, but your correspondent isn’t going to lose his job if he is wrong. That said, choosing to reinvest the money saved in another faddy area is a bold call. Wearable devices have been around for a while, but the limited success to date has been in the fitness trackers. They are simple and cheap. We haven’t really seen as significant breakthroughs for more health orientated devices, but apparently the Nokia team has a bit of a hunch.

Only time will tell whether this is the right decision, but we have a feeling ditching the VR side of things was the right call. Digital health however…