Samsung’s in trouble. The Korean electronics giant is being sued by Apple in just about every market for copying Apple’s iOS, iPhone and iPad designs… and Apple’s winning. Worse, Samsung’s biggest mobile partner, Google, just bought out one of their main smartphone competitors, Motorola, for $12.5 billion. Now that Google has an Android hardware team in-house, how much longer will third-party smartphone makers like Samsung be given equal access to the Android operating system?
It’s a tight spot, and Samsung knows it’s in trouble. Samsung boss Lee Kun-Hee reacted to the news of Google’s acquisition of Motorola Mobiity by telling top managers on Monday to “boost software prowess, patent pools and talent,” as well as seek out opportunities for mergers and acquisitions. Samsung — probably correctly — thinks this will be a quicker way to boost the prowess of their own in-house mobile OS, Bada.
Well, bada bing, bada boom, because a huge acquisition opportunity may have just presented itself. After a single round, HP just threw in the towel on webOS, a mobile operating system they purchased along with Palm back in 2010 for $1.2 billion.
We’re just spitballing here, but maybe Samsung should buy webOS and the Palm business out from under HP? Here’s why it could be a good move.
From Samsung’s perspective, the move seems to make a lot of sense.
For one thing, there’s the patents. Samsung is being sued all around the world by Apple right now for patent and IP violations, but HP ended up picking up a hefty patent portfolio from Palm when they purchased them back in 2010. Palm, after all, basically created the PDA space in the 1990s, and smartphones today are essentially evolutions of the PDA. They’ve got almost two decades worth of patents that are directly relevant to the modern mobile space. That patent portfolio could end up giving Samsung a lot of ammo to fight Apple with.
It’s a bit old, but this Engadget piece analyzing the relative strength of Palm and Apple’s patent portfolios makes it clear that HP is currently in possession of a few doozy patents that could potentially be leveraged as weapons against Apple, covering everything from the way the iPhone handles simultaneous telephone calls to the way it handles brightness control. There’s even a hell of a patent in there that reads like a line-by-line description of how the iPhone’s Phone app works.
Not all patents are made equal, but the trove of smartphone and tablet applicable patents HP bought from Palm would doubtlessly make a difference in Samsung’s fight against Apple.
Then there’s webOS itself. It’s never made much of a dent, but it’s a solid operating system that, with its card based interface, isn’t nearly as similar to iOS as Android is, especially with Samsung’s TouchWiz UI. It would help Samsung differentiate itself from Apple’s mobile offerings.
webOS’s strengths haven’t eluded Samsung. In fact, even before HP announced it was killing off its webOS devices division, Samsung was reportedly in licensing talks with HP to put webOS on a smartphone or mobile device.
Samsung, of course, already has their own mobile operating system in Bada, but if Samsung’s chief Lee Kun-Hee’s comments are anything to go by, Samsung doesn’t have a lot of confidence in Bada. Kun-Hee reportedly told his company’s executives earlier this week that they needed to strengthen Bada in the wake of the Google-Motorola acquisition… and put a heavy emphasis on acquisitions.
webOS isn’t exactly a top dog in the mobile OS field, but it still has three years of momentum behind it, with an app market that dwarves the paltry offerings of Samsung Bada OS. It’s also a much slicker offering that differentiates itself dramatically from iOS in key areas.
There seems to be a lot to recommend Samsung to buy HP’s Palm business. The patents would potentially make a huge difference in Samsung’s legal fights against Apple, and having webOS in house would give Samsung a flashier, slicker and more modern mobile operating system to rely on than Bada. It would also help Samsung phase out their dependence upon Google’s Android OS, especially in the wake of the Google-Motorola deal.
But would HP sell Palm, webOS, patents and all? According to HP, they will “continue to explore options to optimize the value of webOS software going forward,” which could mean anything from trying to sell webOS to someone else to licensing it to third-parties.
One thing that is for sure is that HP is reportedly banking on making an IBM-like transition from mostly being a PC maker to making its money on cloud software and enterprise services. webOS licensing seems like a strange fit in that strategy re-alignment, especially considering how hard it is to make a dent against Apple and Google. Despite practically owning the smartphone space a mere four years ago with Windows Mobile, Microsoft’s Windows Phone 7 isn’t making much headway in the licensing space. Why license an OS when Google’s giving away Android for free?
Of course, if other Android licensees become disenfranchised after the Google-Motorola acquisition, HP might be in a good position with webOS licensing. Right now, though, it seems like an uphill struggle for HP… a company that is already undergoing a profound transition to a new corporate strategy. So HP may well want to sell of webOS.
But what about the patents? If HP’s exiting the mobile game entirely, those patents would be worth a lot more being sold during the escalating patents arm race than being locked away in a file cabinet.
Will Samsung buy the Palm patents and webOS from HP? There’s too many unknown factors to be sure, but one thing’s for certain: with Samsung being pummeled by Apple in courts around the world, and with Google seemingly turning coat and making preparations to produce Android devices in-house through Motorola Mobility, HP’s Palm patent portfolio and webOS have got to seem like a couple of juicy plums. The only question is how high on HP’s tree they’re dangling, and if they’re as ripe for the picking as they seem to be.