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HP Internally Values webOS At $315 Million

By: , 11/21/2011 5:45 pm | 12 comments

Hewlett-Packard stated in their earnings call that webOS has an impairment expense of approximately $885 million. This means that, at least internally, HP values webOS at $315 million. This figure matches recent rumors that HP is investigating the sale of webOS for a few hundred million dollars.

Of course, that value amount could also indicate that HP merely sees value in patents and not in the software, though we hope that’s not the case.

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About Arthur Thornton

Arthur is an 18-year-old webOS fanboy and developer. Arthur's first experience with webOS was in August 2009 when he got a Palm Pre. Since then he's owned many of the webOS phones produced, released several loved apps into the App Catalog, and even held an internship with HP's webOS GBU. Fresh off of that internship, Arthur is back at webOSroundup as a contributor.
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  • David Bowser

    Any company that is legitimately concerned with getting sued by MS or Apple for mobile related issues would buy the patents for that cost in a second.

    • Charles Knight

      “Bottom line is that WebOS and the Palm patents are worth AT LEAST that much.”

      Are they really? We keep hearing about these magic patents (which everybody knows are magic but nobody can explain which specific patents are so magic) but then if you think about the wider context, a lot of things don’t make sense. We are currently seeing a number of companies buying up patents to protect themselves in the current patent cold/hot war – so why hasn’t anyone rushed to buy the Palm patents? 

      Samsung said publicly they were not interested, HTC said publicly they were not interested, Sony said publicly they were not interested – if those patents are so great, why in the current market have all three of those companies decided they are not interested? Maybe they took a look and they simply aren’t that useful/interesting? 

      But let’s say, for argument sake, that the patents are all they are cracked up to be, this leads to another problem – a $315 million valuation says that WebOS itself is worthless or next to worthless. Which in the currently climate, actually does make a lot of sense. If you buy WebOS, you buy an operating system but largely nothing else – after three years of being available, there is no measurable user-base on the phone side and a lot of bargain hunters on the  other side. There is no functioning ecosystem beyond a small app market which is largely populated by one-man band developers (not a knock on small developers, it is what is it) and no real content providers. 

      So at the moment buying WebOS is simply a ticket to then have to spend billions of dollars on building up a content infrastucture (that can compete against amazon, itunes and google), R&Ding new hardware, gaining carrier partners, marketing, supply chain issues etc etc. 

      The bottom line is that I think we are simply seeing an accounting trick, they are holding off shutting down the software division and killing WebOS until December because then it did not have to appear on the Q4 results and can appear as much smaller number in the Q1 results next year. The patents might eventually get sold but I doubt that it will be for $350 million.

      • Brother Al

        I sadly believe you are quite right… an honest, point blank view of the situation from a realistic standpoint.

        We have held Vigil for far longer than we should… Honestly, we’re kinda like the poor SOBs at “High Brazil” in the movie “Erik the Viking”

        Sad news indeed tho

      • Anonymous

        Cue the magic. Palm has been in this game for almost 20 years, and they pretty much wrote the book on PDA based contact management and calendaring. Not trying to pick on you, but your thoughts are not unique.

        http://www.engadget.com/2009/01/28/apple-vs-palm-the-in-depth-analysis/

        Palm has patented pretty much every standard interface process for smartphones. Thay have HUNDREDS and the article picks out four just to show where Apple would get burned. Forget defending against Apple or MS, the Palm patent portfolio would allow them to attack.

        As far as companies not rushing in to buy the patents and the HP accounting shenanigans and valuation… I think companies ARE trying to buy the patents as they did when Palm sold to HP, but neither time has HP or Palm been willing to sell the patents by themselves. HP will continue to play accounting games to attempt to win back shareholder confidence.

        Another note about buyers and other overall value of the patent portfolio: whoever buys it has to be of a mind to use it. They have to either have a plan to use WebOS, or to starting licensing patents/suing everyone in sight, because the $$$ is just too high to spend on defense. No single company has incurred the cost ($400 mil) that I associated to the Android-MS licensing fee, but I am sure Samsung is wishing it had some better ammunition in its fight against Apple

        • Charles Knight

          “Palm has patented pretty much every standard interface process for smartphones. Thay have HUNDREDS and the article picks out four just to show where Apple would get burned. Forget defending against Apple or MS, the Palm patent portfolio would allow them to attack.”

          It’s a nice idea but there is a big problem with this… It’s not clear how many of those foundational patents, Palm actually anymore, they went with PalmSource Inc and were then bought up by the Japanese company Access Co. and are managed by patent holding company Acacia Research Corp.

          “As far as the former Palm patents are concerned, “we basically control the software, and H-P controls the hardware,” Mr. Ryan said
          during an interview Friday. H-P in June broached the idea of marketing the software for use in
          products such as appliances and cars. Mr. Ryan said his company’s reading of contracts associated with the original split of PalmSource from Palm would suggest that H-P would need a license from Acacia to
          pursue those options.”

          and

          “Microsoft last October forged a deal with Acacia and Access to license 74 patents, including patents covering Palm’s software inventions”

          Read more: http://online.wsj.com/article/SB10001424053111904279004576522372578192978.html#ixzz1eYbeuk7O

  • http://twitter.com/TheTechChat TheTechChat

    I wonder if that valuation is for the patents or just webOS itself. I’m inclined to think it’s just webOS. In fact, that statement, that webOS is worth $X, would seem to refer to just the OS. The patents wouldn’t be a part of webOS at all.

    • http://www.arthurthornton.net/ Arthur Thornton

      They didn’t state it like that, but rather that their acquisition of Palm, Inc for $1.2 billion now has an impairment expense of $885 million associated with it, which would indicate that the whole remainder of Palm is $315 million.

      As such, this would have to include the patents in that valuation, or it should anyhow

  • Oheneaku

    I’m getting tired of these HP news. Sell the damn thing so we can have better devices from someone who knows how to build exceptional hardware.

  • Malette

    For that amount someone should pick it up. Sure it has it’s challenges, but someone should see it’s values hopefully beyond the patents.

    • http://www.arthurthornton.net/ Arthur Thornton

      You’re assuming any company is even interested in the software side of webOS. To be honest, I feel that if a company acquires webOS, it’ll mostly be for the patents along with a few key aspects of the software, namely the Enyo framework.

      • Malette

        That is what I was referring to. Sure I’d love to see further webOS products, but I’m losing hope. There has to be a company interested though since there are valuable patents.

  • http://profiles.google.com/anayagamingllc Jason Buffalo

    This can only mean for the WebOS Business only and not the complete Palm Patent Portfolio, i think a better clarification to what is included in the WebOS Unit.