Nokia, which quit making mobile phones to focus on network equipment, has now conceded defeat in the virtual reality market, with the cancellation of its OZO camera line and the loss of more than 300 jobs.
The OZO was launched in 2015 as Nokia, fresh from selling its handset division to Microsoft, looked for ways to revive its brand outside its core telecoms infrastructure operations. The camera — described by one technology website as looking like a cross between “a 2001: A Space Odyssey prop and a cyberpunk sperm” — was introduced as virtual reality became the hottest trend in technology.
With a $60,000 price tag, the OZO comprised eight cameras to provide 360-degree sound and video. It was aimed at professionals looking to create rich content, with Nokia anticipating a boom in the market for virtual reality headsets.
Yet virtual reality has not taken off as a mainstream high-end consumer technology as the company had hoped. Cheaper headsets, often using a smartphone, have proved more popular.
Its retreat from virtual reality has been characterised by Nokia as a move to focus on another hot consumer area — digital healthcare — at its Nokia Technologies unit. The division, which controls all of Nokia’s patents, also contains the Withings business it acquired in 2016 and now operates as Nokia Health to sell scales, smartwatches and blood pressure monitors.
The Finnish company will cut almost a third of the staff at Nokia Technologies, accounting for 310 roles, which will hit its workforce in the US, UK and Finland.
Nokia said it would continue to support OZO users but would not develop any more cameras, as the virtual reality market’s development had proved “slower than expected”. It would continue to explore licensing opportunities in virtual reality.
Ben Wood, principal analyst with CCS Insight, said the OZO proved hard to use for some customers and that companies including Detu and Instant 360 emerged to compete in the professional-grade virtual reality content market. “The OZO camera failed at numerous levels. It was too expensive at launch, making it a very niche product in an already niche market,” he said.
Gregory Lee, president of Nokia Technologies, 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.”
David Mullholland, an analyst with UBS, said the closure of the OZO line was a “clear positive on the focus of profit generation”. He calculated that the move could save €50m in salaries and research spending for a product stream that was bringing little revenue.