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Cameras

Nokia's fancy VR Ozo camera is no more

The Finnish tech company is switching its focus to digital health.

nokia-ozo-launch-london-3.jpg

It's a case of the oh noes for the Ozo.

Andrew Hoyle/CNET

Nokia is killing off further development of its mega-expensive VR Ozo camera as part of shift in focus to digital health tech, the company announced Tuesday.

Blaming slower-than-expected growth in the VR market, Nokia said it would continue to focus on licensing opportunities and fulfilling its commitments to existing customers, but would otherwise redirect its efforts away from Ozo. 

It marks a huge shift for the company, which could mean laying off staff as it reduces investments in virtual reality and redirects efforts into other projects. The Finnish company said it will now be focusing on becoming a leader in the health tech space following its buyout of Withings last year.

"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 the company's president, Gregory Lee, in a statement.

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A VR industry report from analysts at CCS Insight published this month forecasts strong growth in the VR devices industry, with sales this year up 47 percent over 2016. By 2021 the industry is expected to be worth $11.9 billion with 99 million devices sold. But the strong sales of headsets clearly haven't had the knock-on effect on cameras that Nokia was hoping for.

Nokia unveiled the $40,000 camera (initially priced at $60,000) back in the summer of 2015 to meet demand for high-quality VR content for headsets made by the likes of Oculus, Sony, Google and HTC. With eight synchronized shutters and integrated microphones, the camera can record stereoscopic 3D video and spatial audio. It quickly made Nokia the industry leader in the field, said CCS Insight analyst George Jijiashvili, but since then other manufacturers including Detu and Insta360 have released much cheaper and very capable 360-degree cameras.

"Given its position, I was surprised Nokia decided to step away from this space at a time when it's seeing tangible, albeit slow growth," said Jijiashvili. "It is now clear that due to this slower-than-expected rate of growth of VR and 360-degree content, Nokia wasn't committed to a long haul."

Nokia expects up to 310 out of its 1,090 employees in Finland, the US and the UK to be affected by the decision, although no layoffs have been confirmed. "Employee negotiations will start next week, and, where possible, we will look for opportunities to redeploy people in new roles," the company said in a statement.

This change in focus will not impact Nokia's patent licensing division or its efforts in 5G and the internet of things.

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