Nokia believes that the VR market is witnessing less than expected growth, and hence, has decided to shut down its efforts for developing the Ozo VR camera. Nokia, whose decision will affect 310 jobs, will instead focus on patent licensing and digital healthcare.

Nokia Ozo VR camera
Hermann / Pixabay

On Tuesday, Nokia announced that the decision to shutter Ozo VR camera will impact a third of Nokia Technologies’ workforce. The employees will be ousted mainly from Finland, the US, and the UK.  Nokia announced its decision in a press release, saying it will “maintain commitments” to existing Ozo customers.

In 2015, the Finnish firm announced the Ozo VR camera system, describing it as a high-end camera for professionals interested in 360-degree video. Initially, the camera was priced at $60,000, but later the price was reduced to $45,000, notes The Verge. The camera captured 4K images and video with help from eight wide-angle cameras, which came in a package that weighed 9.3 pounds.

The Ozo VR camera was Nokia’s first product after the sale of its handset business to Microsoft. The content developed from the camera was viewable on HTC Vive, or the Windows 10 Mixed Reality headsets, which will ship this fall.

Nokia shutting the Ozo virtual reality camera development was something of an inevitable decision. Nokia’s product cost $60,000 initially, partially because of the tech involved and the immaturity of the market. So, it was clear from the start that it was not a mass-market product. It must be noted that few major media companies such as Sony Pictures did invest in the Ozo VR camera.

Since, the VR market failed to grow at a pace that Nokia expected it to, along with rivals making cheaper alternatives, Nokia’s decision appears sensible. The Finland-based company, however, did say that it wants to “optimise” the investment in the VR, but maybe not by developing a VR product. “The slower-than-expected development of the VR market means that Nokia Technologies plans to reduce investments and focus more on technology licensing opportunities,” the company said.

For Nokia, its patent business has been a major contributing factor in the revenue. The business is based on Nokia’s technology legacy and the development being carried by Nokia Bell Labs. However, the company also wants to develop its digital health business with help from Withings, the activity tracker and health-monitoring device company that it acquired last year for €170 million.

In a statement, the president of Nokia Technologies, Gregory Lee, said, “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.”  Lee, who previously served as Samsung North America’s CEO, was hired just four months back as Nokia’s new global president.

Currently, Nokia operates two units, Nokia Networks, which is responsible for the broadband network infrastructure business; and Nokia Technologies, the unit trusted with keeping Nokia’s brand name alive among the consumers.

In pre-market trading today, Nokia shares were in the green. Year to date, the stock is up over 23%, while in the last three-months, it is down over 5%.