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Nokia Shuts Down VR Camera Unit, Citing Slow-Growing Virtual Reality Market

Nokia is killing off its OZO virtual-reality camera and hardware product line, as the company doesn’t see VR taking off anytime soon.

With the shutdown of the OZO business, Nokia Technologies will cut 28% of its workforce. The company expects to lay off up to 310 of the 1,090 employees in Nokia Technologies, mainly in Finland, the U.S. and the U.K.

Nokia cited the “slower-than-expected development of the VR market” as leading to its decision to halt development of further versions of the OZO VR camera and hardware. The company said it plans to continue supporting existing OZO customers. Nokia announced the orb-shaped OZO camera, with 360-degree video capture, a little over two years ago.

The OZO+ VR camera — aimed at professional filmmakers and producers — was originally priced at $60,000, but Nokia lowered the price several times and recently was selling it for $25,000.

“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,” Gregory Lee, president of Nokia Technologies, said in a statement.

Instead of chasing VR, Nokia Technologies will double down on digital health, focusing investments on Withings, the French smartwatch and medical-device maker in 2016. Nokia said it will leave the division’s patent-licensing business “untouched.”

Industry analysts have issued bullish forecasts for the VR market, but so far the segment hasn’t caught fire. Other companies that develop and sell VR camera equipment include Google, Samsung Electronics and Jaunt Inc.

Four years ago Finland-based Nokia sold its smartphone biz to Microsoft. The deal closed in 2014 and Microsoft subsequently made a series of significant layoffs in the division.

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