Can the third time finally be the charm for webOS? The star-crossed operating system has now seen two commercial failures under two separate corporate umbrellas. It's time for webOS to find its third home. It's about time, too, since the platform has needed one since 2011.
A gloomy trip down memory lane
Of course, its first home was Palm, where it was created. Despite being widely regarded as an innovative platform with intuitive gestures, webOS wasn't enough to save Palm, as its devices failed to deliver where it counts: sales.
In some ways, Palm's failure was a byproduct of bad luck and carrier ambivalence. In 2009, Palm was about to score a huge distribution and marketing deal with the Verizon (NYSE: VZ ) , the largest domestic wireless carrier. Big Red abruptly flip-flopped and decided to bet big on Google (NASDAQ: GOOG ) Android and a joint Droid marketing campaign that proved rather successful. That left Palm out in the cold and it was relegated to an exclusive deal with Sprint Nextel, the third-largest carier.
Hewlett-Packard (NYSE: HPQ ) thought it could fare better, and scooped up the company in early 2010 in what may have been the worst deal ever, paying $5.70 per share for a company that many thought was headed to $0. Indeed, HP would soon end up writing off $3.3 billion -- more than the initial $1.3 billion acquisition price. That was after ex-CEO Leo Apotheker axed webOS hardware, and about the same time that his replacement CEO Meg Whitman effectively donated it to charity by making it open source.
Pack it up
webOS will now be flying under a South Korean company's flag, as LG now hopes to give it a shot. The doomed platform is not likely to make its way back into smartphones and tablets of the future, and instead the company is reportedly looking to repurpose it for a new lineup of smart TVs. However, LG didn't rule out this possibility altogether.
Like most mobile hardware OEMs in this day and age, Android devices of various sorts dominate LG's smartphone lineup. There were already rumors swirling late last year that LG was looking at using webOS for a smart HDTV, but now LG is taking that a step further and acquiring the webOS division, which will include the source code, documentation, and engineers. The webOS team will join a new research and development lab that LG is setting up in Silicon Valley. HP will keep the webOS cloud services division.
LG had reportedly been contemplating which platform to use for its smart TV push, with the two primary candidates being webOS or Google TV. Not only has Google TV had its fair share of missteps as a platform, but Big G supposedly wanted too much control over the interface and experience of its platform, which was gently nudging LG in the general direction of webOS in the first place.
A new parent
It's a surprising turn of events for webOS, as there were plenty of potential suitors that were reportedly remotely interested in webOS two years ago. Everyone from e-tail giant Amazon.com to Taiwanese OEM HTC to smartphone fallen angel BlackBerry have been named as expressing interest at one point or another. Even IBM, Oracle, and Intel were rumored to be interested in the related patents.
Those rumors were a year and a half ago, and talk of anyone acquiring webOS had died down in recent times. At least LG probably didn't have rival bidders to compete with and is likely paying very little for webOS, although no financial terms have been disclosed yet. HP had written down the carrying value of its intangible assets and goodwill related to Palm to just $273 million at the time. HP is keeping all of the patents related to Palm and webOS and LG is merely licensing them.
Can LG give webOS a good home?
The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.