webOS is dead! Long live webOS!

Finally we have the answer and it's not the one I was expecting. Today Meg Whitman announced that HP will make webOS (the ill fated mobile operating system they bought from Palm) open source!

Everyone (including me) had predicted HP would either sell webOS or keep it. Instead they have gone down a middle road, making it free for the community to use (open source), while still retaining the all important patents.

In theory this decision sounds great, because the community has always been the most passionate advocate of webOS, but this won't help unless someone is willing to make the hardware. Therefore to ensure webOS does not slowly fade into the background we need a company such as HTC, Samsung or Sony to build a webOS device. Something that the community can then rally behind.

I think if this was two years ago, all of the major hardware manufacturers would have built a device, but with Google Android (also Open Source) and Microsoft Windows Phone openly available, I'm worried it's too little, too late (just look at MeeGo).

As stated in my previous webOS article, I would love to see Sony build a webOS device (as they are not heavily aligned to Google or Microsoft), but this strategy would still come at a risk, as it is unclear how much traction a device running webOS would achieve. Therefore I think all the Palm and webOS fanboys need to cross their fingers that at least one company has the courage and vision to give it a try!

What's left for webOS?

webOS is a great mobile operating system! In fact some would argue it's the best mobile operating system available (yes, even when compared against iOS and Android). If you don't believe me, just check out these glowing reviews:

"webOS 2.0 is probably neck and neck with iOS4 when it comes to polish and ease of use, and that's a pretty huge thing for Palm." - Engadget

"webOS was always an impressively slick operating system and it remains ahead of most of the competition in terms of sheer enjoyment to use. This is now also backed up by rapid performance and a wealth of features that again puts it at least on par with the rest." - Trusted Reviews

"webOS 2.0 still has an edge on the competition in certain categories with the advantages it had at launch: best of breed smartphone multitasking, unobtrusive notifications that can let you act on (or ignore) alerts without leaving your current app, convenient management of WiFi and Bluetooth, deeply-integrated web standards, easy development" - PreCentral

Unfortunately this was before HP and before webOS development came crashing to a halt. As a result, instead of writing about how webOS is a serious threat to Apple and Google, we're actually facing the final curtain call, with HP expected to announce the future of webOS within the next couple of weeks. Will they decided to keep it and if so, in what form? or will they cut their loses and sell?

So what will HP decide to do? Honestly, I don't think anyone knows. Although HP are still a technology superpower, they are currently facing an identity crisis regarding their future. These challenges are so big that we have seen them go through leadership at an alarming rate, with new CEO Meg Whitman attempting to steer the ship back on course. In fact only a few weeks ago Whitman held an all staff meeting to outline their plan for webOS, stating -

"It's really important to me to make the right decision, not the fast decision," and that "If HP decides to do this [to keep webOS], we're going to do it in a very significant way over a multi year period."

Although it's great to hear Whitman addressing the webOS issue, her response is far from conclusive. The only positive is that if HP decide to retain webOS then it sounds like they will be willing to invest in its future. This in itself is a bold statement as HP have already reportedly lost over $3.3billion through the Palm acquisition.

So if HP decided to sell webOS, who would actually buy it? A couple of years ago when Palm first went on sale I personally felt it was a great opportunity for someone like Sony, HTC or Cisco to get a serious head start in the mobile operating system market (which every industry analyst is predicting to be massive in the future). Unfortunately I don't think the story is as compelling as it once was, as due to the uncertainty that has surrounded webOS for the past year, the ongoing development has fallen seriously behind. For example, webOS could easily compete against iOS 4.0 and Android 3.0, but both Apple and Google have now released major revisions with some significant new features. Therefore anyone that buys webOS at this point will immediately be playing catch-up against some very strong competition.

The other option is that HP could give webOS to the community, in the form of an Open Source project. This would be great, as anyone could then build webOS devices (just like Google Android). Unfortunately this scenario seems unlikely, but with the recent leadership changes maybe we will see a new HP, more willing to take risks and embrace open source (let's hope so!).

What do I think will happen? If I was a betting man, I would put my money on HP keeping webOS. Personally I think they have already invested too much money to sell (or give away) at this point. However, this does not necessarily mean we will see new mobile devices. Instead I believe HP may look to integrate the best parts of webOS (such as the user interface and touch technology) into their existing products, like printers and scanners. 

My dream scenario (although there is almost no chance of this happening) is for Sony to buy webOS from HP. Yes, I realise that sounds mad, but hear me out...

Sony are currently a little lost in the mobile space, they recently bought the rest of Ericsson so they have the hardware capabilities, but they don't have a decent operating system. They can use Android or maybe even Windows Phone, but both Google and Microsoft have already created strategic partnerships with other hardware vendors. Therefore Sony run the risk of becoming a second rate manufacturer, which is not the way to win the war! Now, just imagine Sony hardware (like they used to design) combined with the elegance of webOS! This could be a great device, potentially even rivaling the iPhone in terms of hardware and software integration.

Ok, I'll stop dreaming at this point and face the reality that in the next two weeks we will likely hear HP announce the end of webOS as we know it. At which point it will be down to the fanboys and homebrew community to show the world what could have been. I already have my Palm Pre 2 ready!

webOS - The Fire Sale!

It has been a strange couple of days for HP (Palm) and their mobile operating system webOS. On Thursday last week we received the news that HP would cease production of webOS hardware only 40 days after releasing their first product, the TouchPad tablet. This was great shame, as although the tablet was released to mixed reviews, I think everyone saw its potential and in my opinion (having used a number of Android tablets) it was already the second best tablet on the market, behind the iPad.

 

Unfortunately none of this matters now, as HP have clearly stated that their dip into mobile hardware with webOS is over. So the real question is, what happens to the estimated 1 million TouchPad tablets that were shipped to retailers across the US, Canada and the UK? Surely you would have to be crazy to buy one now for the £400 price tag...but what if I said you could pick one up new for just £89?

Well that is exactly what happened, on Sunday BestBuy in Canada and the US dropped the price of the TouchPad to just $99, with the UK following close behind on Monday with a price drop to just £89! That means you could buy a tablet that was previously being sold for £400 just one day earlier, for approximately 20% of the original price.

Unsurprisingly the Internet went crazy and within seconds of the price drop hitting the web, retailers across the world sold out of every TouchPad. In fact, the sudden surge of interest was so great, that major UK retailers web sites such as Dixons, PC World, Currys and The Carphone Warehouse, were all brought to their knees, in a DDoS style attack. Now obviously these devices were being sold at a loss, however I think everyone (including HP) were caught off guard by just how popular the TouchPad would be at this price point.

So this makes me wonder, should more tablet manufacturers sell their product at a loss to gain valuable market share, similar to how the games industry operates? For example, on Saturday it was believed that HP had sold as little 20,000 TouchPad tablets, however just two days later they have likely sold close to 750,000, with numbers expected to rise as other retailers sell off their remaining stock. Suddenly out of nowhere, the TouchPad has a modest user base and as Apple have proven it's the user base that unlocks other revenue streams, such as music, applications, games, advertisement and other services. Therefore what if HP continued to sell the TouchPad at a loss until they reached 2 million users, at that point they could aggressively go after developers in the hope to start creating the webOS ecosystem. They would then be in a position to release a new TouchPad, but in the knowledge that users have already invested in the webOS platform and therefore become tied to it.

This is exactly the same business model as Apple, by getting users to invest in the App Store, iTunes and iBooks, so they are tied to the platform going forward. The big difference with Apple is that users are also willing to pay a premium for the device, something that I believe is unique to the Apple culture.

So will this new found interest cause HP to change their minds about webOS? I think the answer is no. But it might make other tablet manufactures think about following the games industry model by selling at a loss to gain market share.

Finally, what about those people that actually bought a TouchPad? Personally I think you got a great deal, because even if HP completely drop support for webOS and no other company picks it up, there will still be a hardcore "cult of Palm" developer community driving forward through homebrew, which happens to be very simple to enable on webOS devices ;-)

HP (Palm) webOS

I've been a long time fan of Palm's webOS mobile operating system and although it had a rocky start to life, I've always believed it has the potential to be a major player in the market.

It's always been clear that Palm have some amazing software engineers working on webOS (just look at their implementation of multi-tasking), but the trouble has always been finding the right balance between their great software and the hardware (something Apple are experts at). Don't get me wrong, I think the Palm Pre was a good phone, but unfortunately it was seriously under-powered and dated when compared to the competition.

The other big issue for Palm was their global reach and branding, as they simply didn't have the right resources to get the big carriers (or customers) excited about their products. For example, in the UK only O2 carried the Palm Pre, but actually dropped it from their product range due to poor sales.

Thankfully, back in April, everything changed with the annoucement that Palm had been aquired by HP. This was an exciting prospect, as HP could bring to Palm the things they were desperately missing. For example, HP have deep pockets and a wealth of hardware experience. They also have the right resources in place to market and sell products on a global scale to both the consumer and businesses. This means that Palm can focus on what they do best, creating amazing software, and leverage HP to pull together the whole package.

Today, we got to see the first HP/Palm devices and a significant reboot of the company's webOS-based mobile strategy. At the event, HP announced three new mobile devices all running webOS. The first two were new smartphones, replacing the Palm Pixi and Palm Pre 2. They are known as the HP Veer, which offers a credit-card sized form factor with a slide-out keyboard, and the HP Pre 3, the next-generation version of Palm's debut webOS device. HP also unveiled the highly anticipated HP TouchPad, which is a WebOS driven 9.7-inch tablet. The image below shows the three devices:

All three devices were demonstrated at the event and they look great. They even showed a few examples of how these devices can be used together, using the next generation TouchStone, that enables wireless charging and wireless sharing of data between the different devices. The sharing feature was especially cool, allowing you to answer calls and respond to txt messages on your TouchPad, routing the traffic through your HP smartphone. The full specification of the three devices can be seen below: 

HP have also released a number of promotional videos highlighting some of the new features. The first video shows all three devices:

The next video shows the HP Pre 3:

Finally, the HP TouchPad. Could this be the iPad killer?

Overall I was impressed with the HP/webOS launch event and with webOS finally getting the hardware it deserves, I hope this could be the start of something special. Another tip-bit from the event was that HP hinted that webOS would also be available for the desktop. Could this be as a Windows competitor? They didn't provide any additional details, so I guess we'll have to wait and see.

For more information (including hands-on videos) I suggest you head over to Engadget and PreCentral.

Who should buy Palm?

It’s been a busy couple of weeks for Palm. First we had Palm's CEO Jon Rubinstein outline the company’s future plans and how he believed it would result in profitability.

“We do have $590 million in the bank, and we have a plan that carries this company forward. Now, we need to be frugal and we need to invest in those areas that have the best return for us, but when I read that we're going out of business or our stock is worth zero or those kinds of things, it defies logic to me.”

“it may take us a while, but we will work our way through this, and we're continuing to invest very heavily in engineering on both webOS development and on new product development.”

Then, only days later, Bloomberg reported that Palm was putting itself up for sale, with HTC, Lenovo and Dell apparently very interested. Since that time we have seen almost every technology company (RIM, Nokia, Microsoft, Apple, Sony, HP and Cisco) linked with a potential take-over.

Before predicting who is the most likely candidate to purchase Palm, it's important to understand what they have that is worth buying. In my opinion Palm’s value comes from two main areas:

Intellectual Property (IP): Palm has been operating in the mobile computing market since 1992 and over that time has secured a solid number of patents, specifically for "Integrated Handheld Computing and Telephony System and Services," (otherwise known as the smartphone). Although the actual number of patents owned by Palm is uncertain, most analysts believe that they may have the most impressive patent portfolio in the entire smartphone industry. To back this up PatentVest CEO Anthony Mazzarella declared to Investor’s Business Daily that:

“Based on our metrics, the value of Palm’s intellectual property is along the same order of magnitude as Apple. The market is overlooking the IP value in Palm, which has great value.”

Intellectual property is important for any company as it secures their investment and allows them to claim royalties if other companies use that patent. It also serves as a barrier against most serious patent infringement cases. This could be especially useful at the moment as many companies such as Apple, HTC, Nokia, Google and others are currently involved in high profile patent infringement litigation.

Mobile Operating System (webOS): The second, and in my opinion under-appreciated, value within Palm is their mobile operating system webOS. It is important to remember that other major players such as RIM, Nokia, HTC, Sony, etc, don’t have their own "next generation" mobile operating system and as a result may be forced to build their devices around third party solutions. Due to this lack of innovation we are rapidly entering a world where only four major mobile operating systems (iPhone OS, Google Android, Windows Phone 7 and webOS) offer a smartphone experience that users have come to expect.

Finally, when you consider that Windows Phone 7 is not set for release until Q4 2010 and Google Android still faces many challenges with a fractured deployment across different hardware manufacturers and devices, webOS is arguably the second best mobile operating system on the market today.

Although these two areas are key, you also have other factors such as Palm’s well-established carrier and manufacturer relationships, the expertise of its workforce (much of the team that previously worked on the iPhone OS) and more tangible items such as their assets. When you take all of this into consideration I have seen valuation reports anywhere from $1billion up to $2billion.

So with this in mind which competing company would be best placed to acquire Palm? In my opinion it comes down to three likely contenders:

HTC - My number one candidate is HTC. We have seen for years now that they are fantastic at building quality hardware (Nexus One, HD2, Desire, Legend, etc) however all of these great handsets use third party mobile operating systems, such as Google Android and Windows Mobile. The advantage of this setup is that it allows HTC to focus on what they do best, building fantastic hardware. Unfortunately this dependency also comes with a potential threat, if their relationship with Google or Microsoft were to breakdown and other hardware manufacturers such as Motorola or Sony become a favoured partner, then HTC could be left in a very difficult position (great hardware, no software). Therefore it makes sense for HTC to have their own mobile operating system whilst still designing and manufacturing handsets for Google and Microsoft. This would strengthen their position in the market massively and give them ability to build a device exactly to their needs (similar to how Apple operates with the iPhone). I for one would love to see a device with the power of the HD2 or Desire running webOS.

The second key advantage for HTC is the vast intellectual property that Palm would bring. This would be especially important at the moment due to their current high profile legal battle with Apple over patent infringement.

Lenovo - Lenovo are a rapidly growing company with a powerful product portfolio. The acquisition of the IBM PC Company Division back in 2005 had a major impact and they are now the forth largest vendor of personal computers in the world. More recently, in November 2009, Lenovo announced its intention to purchase Lenovo Mobile Communication Technology, which ranks them number three in China’s mobile handset market. These most recent acquisitions show that Lenovo are serious about aggressive growth and Palm could provide them the same type of power in the mobile computing space that the purchase of the IBM PC Company Division did back in 2005.

Cisco - Cisco are well known for their aggressive purchasing. They have a growing number of consumer based products (just look at Flip and Linksys) and are not afraid to diversify their product range with new innovative technologies. Palm could be the perfect place for Cisco to enter the smartphone market and with their global reach, enterprise experience, financial backing and increasingly diverse product range they would have the potential to produce a fantastic product.

You could argue that Apple, Google or Microsoft could easily swallow Palm just for the intellectual property alone, or to remove any potential competition, however they are all currently tightly tied to their own development plans within the mobile market and as a result it seems unlikely that the acquisition of Palm would be a good fit at this time. As for RIM and Nokia, I believe they desperately need access to a quality "next generation" mobile operating system, unfortunately both companies are too proud and would rather go through the process of developing their own mobile operating system than buying one from someone else.

If the current market rumblings are true then we could have our answer in the next couple of weeks. The one hope that I have is that any company that acquires Palm will invest in their products (such as webOS) instead of simply striping their assets.

Update on Friday, April 23, 2010 at 6:47AM by Matt (LifeinTECH)

It looks like HTC have officially pulled out of the race. According to an internal source, there "just weren't enough synergies to take the deal forward." This is disappointing as I still believe webOS and HTC hardware would be an awesome combination. It looks like we will have to rely upon that hacking community to make my dreams a reality. As for Palm, I believe that Lenovo are now the number one contender. Watch this space...