Could Lenovo Eye HP’s Discarded webOS Technology?
Now that Hewlett-Packard plans to discontinue its TouchPad product that ran supporting its webOS software, could China's Lenovo Group bid for it?
Lenovo, already China's biggest PC maker, is no stranger in acquiring U.S. assets to expand market share. It acquired the remainder of IBM's PC lines in 2006, including the ThinkPad lines and other products.
Now that HP, No. 1 worldwide in PCs, also plans to exit the PC business, Lenovo might eye that, as well, although there are several reasons why not. Lenovo is big enough already and for tax purposes, HP might prefer to spin HP's Personal Systems Group off to shareholders as a separate company.
On the other hand, Palo Alto, Calif.-based HP acquired webOS in 2010, as part of its $1.2 billion takeover of Palm, one of the pioneers in the handheld sector, which is now growing faster than PCs. With the TouchPad now officially scratched, webOS might be valuable to someone else in the market.
Lenovo CEO Yang Yangquing told the Financial Times over the weekend, We will be one of the strongest players in this area, referring to handheld devices and tablets.
Even in China, Apple's shipments in tablets overtook Lenovo's share in the region that also includes Taiwan in the second quarter.
Lenovo, which sells three tablets that run on Google's Android OS and Microsoft 7 OS, fell behind Apple's iPad. But Yang told the FT, Apple only covers the top tier, suggesting Lenovo would like to reach different categories of customers, especially in developing markets.
One Lenovo tablet is priced around $150. Naturally, it uses ThinkPad as one tablet brand name; the other is IdeaPad.
Yang declined to say if Lenovo, the No. 3 global PC maker, would bid for webOS. Nor has HP said it plans to sell it.
Last week, HP Senior Vice President Stephen DeWitt promised the company will keep it. We're going to continue to evolve it, update and support it. We stand by it, he told Bloomberg.
So, in a technology world where patents and intellectual property are king, HP could start licensing it, to Lenovo or anyone else, or call in one of the IP specialist banks, to get a valuation.
Last week's $12.5 billion purchase of Motorola Mobility by Google and the earlier $4.5 billion auction of Nortel Networks patents won by Apple, Microsoft, Research in Motion, EMC, Sony and Ericsson have created a kind of gold rush for IP.
HP's IP portfolio should reflect that.
Other tablet makers, including Samsung Electronics, are known to have discussed licensing webOS from HP; others in the space, including Taiwan's HTC, South Korea's LG or Canada's Research in Motion might be interested in either acquiring the OS outright or licensing it. So could Dell, the No. 2 PC maker, whose Streak 7 tablets have not sold well.
Conversely, had the TouchPad proved to be flying off the shelves, all these manufacturers might be eager co-licensees of webOS now. Instead, HP said the webOS sector lost $332 million on revenue of only $266 million.
HP now has trimmed the TouchPad price to $99 and sold out.
Another reason why HP might license webOS rather than sell it: assuming someone else makes it a big success, enterprise customers might issue tablets that use it to employees. Big network operators, like the Verizon Communications and AT&T's that already buy massive amounts of HP products, will need to support it, assuming someone else's TouchPad makes it big.
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