Samsung To Buy WebOS?

Samsung recently made a statement to say that they aren’t interested in buying HP’s personal computer business, and for good reason in that very low margin sector – but that hasn’t ruled them out of buying WebOS from the company. Indeed, it could be a good fit for the company that is increasingly looking to compete with Apple toe-to-toe, and currently they lack a top-line mobile OS of their own – Bada is more of a stop-gap OS solution between featurephones and smartphones.

HP bought WebOS when they acquired Palm for $1.2 Billion last year, but have so far done little to support the software which most claimed was Palm’s best asset. Indeed, the HP TouchPad was only on the market for 49 days before HP decided to do a complete about face and get out of the Palm-influenced consumer devices business. HP have announced they will no longer be making TouchPads or Pres, but seem to be clinging to the statement that WebOS is not dead. Without a hardware division, however, and no hardware partners currently on board – then WebOS will be dead soon, and I don’t see any hardware partners lining up to manufacture devices designed and licensed to run an OS that may well be lifeless within 12 months.

The only way for HP to get value from that Palm acquisition, then, would be to sell off WebOS – and Samsung could well be a prime bidder. Samsung currently makes smartphones running Android, Windows Phone 7, and its own proprietary Bada OS – so do they really need another OS? Well yes if they really want to compete with Apple and offer their own ecosystem.

Android has become a much less attractive prospect for Samsung and other manufacturers since Google stepped up an acquired Motorola. They can shout until they are blue in the face that this will not change the dynamism of Android’s open platform – but it will. It is not as open a platform as Google likes to make out, and the likelihood of Motorola getting exclusive Google/Android features to the exclusion of other manufacturers is definitely much higher now than a month ago. The patent assault on Android smartphone manufacturers by Microsoft and Apple has not helped matters either.

Microsoft’s Windows Phone 7 is a great OS, and with Windows still by far the widest consumer PC OS – the possibilities for seamless integration and ease of use are endless. That said, WP7 is a proprietary OS and the ecosystem will be Microsoft’s. Yes Samsung will have access to it by making WP7 phones, but they will not have the control nor profit margins that come from ecosystems and user lock ins.

Bada is Samsung’s own proprietary OS, and whilst it works perfectly adequately it is lacking when compared to Android never mind WebOS or iOS. It fills a gap in the market for an easy to use but basic OS for lower-end smartphones – but it doesn’t have the power or app ecosystem of Android, nor the gloss of WebOS or iOS.

WebOS, then, could be the software solution that would finally put Samsung phones real competitors to the iPhone. They lead the iPhone in hardware already with the Galaxy SII, but Android doesn’t match iOS in gloss and simplicity. Add to that the relatively lukewarm reaction the public have given Android tablets so far whilst the iPad sells in droves – and WebOS starts looking like a good investment, especially at a time when Samsung have stated they intend to spend $9.3 Billion on R&D this year and so would have the budget.

WebOS has failed to get traction so far due to the lack of excellent hardware to back up its promise and features (hello Palm Pre and Pre 2), or the product was just a little late to market and not priced aggressively enough to succeed against an already highly dominant player (hello TouchPad). Samsung already has the hardware and undercuts Apple on price for both smartphones and tablets, albeit not by that much.

With the recent HP TouchPad and Pre 3 firesales, there is already a much bigger market for developers to create apps for than there was just a couple of weeks ago – but they will not spend the time doing so if these actually are the last WebOS devices the world will see. If HP acts quickly to sell off the OS to Samsung (or even HTC) then they may get a reasonable price and the OS could go on to grow stronger at pastures new.