Now that HP is killing off its WebOS hardware, the question becomes, what happens to the WebOS software?
And, perhaps more importantly, what happens to Palm’s patent portfolio?
HP could try and licence WebOS, but who would want it? It failed for Palm, and it failed for HP. If they can’t get it to work, can HTC, or Samsung?
Plus, who would pay for the OS? HP isn’t an ad company like Google, so it can’t give away WebOS.
It seems more likely HP would have to sell the Palm assets, which consist of patents and some software no one uses.
Luckily for HP, there’s a very robust market for patents right now!
Apple led a consortium to buy Nortel’s patents for $4.5 billion. Google paid $12.5 billion for Motorola, largely based on the strength of its patent portfolio. Interdigital’s market cap has spiked on rumours that its selling itself for its patents. Kodak’s stock is spiking now that it wants to sell its patents.
The big question is how good are Palm’s patents?
It was in the smartphone game from day one, so we would assume it has a pretty strong portfolio. It’s the only smartphone company Apple hasn’t sued, which suggests to us it’s a pretty strong portfolio. Alternatively, Apple might not care about Palm, so it didn’t bother.
But, when Palm was up for sale a year and a half ago, it ultimately ended up selling for just $1.2 billion to HP. At the time, Apple was interested in buying it for its IP, probably offering $600 million.
With the little patent valuation bubble going on right now, you’d have to think it would be willing to pay a little more.
Apple would pay just to keep it out of its rivals hands.
There’s a good chance Samsung — which is currently in a big patent fight with Apple — would buy the Palm assets. Samsung’s CEO just said he wants aggressive M&A to increase the company’s software prowess.
In other words, HP could actually have a little bidding war on its hands for the carcass of Palm.
If things fall into place, it might even end up making a little bit of money on its Palm investment, thus saving it from a permanent place on the list of the worst acquisitions of all time.
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