Will HTC Buy webOS?
"It goes on and on and on and on, ...
Don't stop believing",
Hold on to the feelin',
-- "Don't Stop Believing," by Journey
If only this song was playing in the background at Hewlett-Packard (NYS: HPQ) board meetings. I envision HP CEO Leo Apotheker cranking it up as he talks up the prospects of selling webOS to someone other than Samsung. If it won't be Sammy, who will it be?
Cue speculation now!
In an interview with the Economic Observer of China, Cher Wang, chairwoman of booming Taiwanese smartphone maker HTC, indicated that her company is thinking about buying a mobile operating system. Wang told reporters that management has had internal discussions but also expressed that the company wouldn't make any impulsive decisions.
The company finds itself increasingly paying royalties from Google (NAS: GOOG) Android ironically to Microsoft (NAS: MSFT) . It's estimated that Microsoft collected three times as much revenue from HTC's Android royalties than its own Windows Phone licenses. That $5-per-device royalty that HTC pays adds up quickly, as research firm IDC pegs its shipments at 11.7 million units last quarter.
Not all of those shipments would be carrying Android, but I think it's safe to say that the majority do . Buying an OS to call its own would allow it to diversify its offerings away from these pricey payments and also from Google's alleged favoritism.
While stopping short of naming webOS specifically, it's an obvious candidate in the current climate. Wang continued that one of her company's strengths is its distinctiveness and ability to shape the experience on top of the underlying OS. The company's well-recognized Sense UI could easily be applied to another operating system.
More smartphone manufacturers are opting to mimic Apple's (NAS: AAPL) integrated hardware and software approach: Google and soon-to-be-acquired Motorola, Samsung and its proprietary Bada OS, HTC and ... ?
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At the time this article was published Fool contributorEvan Niu's wife loves to jam out to anything from the '80s. He owns shares of Apple but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Microsoft, Google, and Apple.Motley Fool newsletter serviceshave recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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