Exclusive: HP weighing sale of webOS unit
(Reuters) - Hewlett-Packard Co is evaluating a potential sale of its webOS software platform in a deal that could fetch hundreds of millions of dollars but likely less than the $1.2 billion the company paid for Palm Inc in 2010, said four sources close to the matter.
Context & Ripple Effects
The sale evaluation is the endpoint of a year-long unwind. CEO signals about licensing webOS surfaced in June 2011, followed by reports of active licensing talks later that month, and HP set a decision deadline on Palm's future in early October. Since then the hardware side has already collapsed: HP discontinued the TouchPad line, pivoted tablets to Windows with the $699 Slate 2, kept the PC business it had been reviewing, and offered developers a discounted $150 TouchPad to hold the ecosystem together.
What changed with this report is the exit path: rather than license or shutter webOS, HP is weighing an outright sale that sources say would fetch hundreds of millions — a fraction of the confirmed $1.2 billion paid for Palm in 2010. PaidContent's pickup of the story names Oracle as a speculated buyer, though that remains unconfirmed.
First-order effects
- webOS developers, already mollified only by HP's discounted-hardware gesture, face a change of platform ownership mid-cycle — whoever buys inherits both the codebase and a community HP has struggled to retain.
- HP would crystallize a loss measured against the $1.2 billion Palm acquisition, closing out the strategic bet that began with the 2010 purchase and ended with the TouchPad's discontinuation.
Second-order effects
- A buyer such as the rumored Oracle would acquire not just an OS but Palm's patent position, adding leverage in the ongoing mobile litigation environment without fielding consumer hardware.
- HP's full pivot to Windows tablets hands Microsoft a committed major-PC-maker partner in tablets precisely as HP stops competing against Windows with its own platform.
Third-order effects
- If the pattern holds, device makers that cannot scale an app ecosystem will keep exiting owned-OS bets via distressed sales, concentrating mobile platforms among a smaller set of players and repricing OS assets well below peak-acquisition values.
- The episode sets a template for how quickly a flagship acquisition can convert into a divestiture — boards under investor pressure treating a two-year-old strategic purchase as disposable once hardware traction fails.
The trend: HP's retreat from webOS is one data point in the broader consolidation of mobile operating systems, as hardware companies abandon owned platforms that fail to attract developer ecosystems and sell them to software-focused buyers.