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Switched On: The webOS triangle

Each week Ross Rubin contributes Switched On, a column about consumer technology.

HP's decision to discontinue production of webOS devices has been widely seen as the final nail in the promising operating system's coffin. Statements from HP on the future of webOS app development sound absurd in the current context. How can, for example, HP continue to promote the webOS app catalog as it has pledged to do when there are no ongoing devices on which those apps can run? How would developers even test apps?

The answer may lie in a complex ongoing reorientation of the webOS triangle consisting of the HP corporate entity, PSG (Personal Systems Group, HP's PC business) and webOS. HP hasn't said exactly what it is doing with webOS. However, the combination of publicly expressing commitment to the operating system while dismantling its own devices points strongly to licensing. In fact, it's highly consistent with it; if HP simply wanted to wage war with (or sell) Palm's patent pool, it wouldn't need webOS developers any more. HP made no secret of its interest in licensing webOS while it was still producing devices based on that operating system. As Switched On discussed last month, though, there is a long, bleak history chronicling the difficulty in building devices based on an OS that a company is licensing. In other words, pursuing both of the contrasting business models of Apple and Microsoft results in inherent conflict.

But as Switched On indicated in the following column on potential webOS licensees (all still valid save for Motorola) that counted out HP's PC competitors, it is not enough for HP to stop producing only the TouchPad and phones. If HP is truly committed to licensing webOS in this age of ecosystems encompassing multiple kinds of devices, PSG cannot stay as HP's PC business competes with many potential webOS licensees. (Dell, though, would probably still be counted out as it competes with HP on enterprise services).

Barring restructuring HP may have wanted to otherwise make, it is cataclysmic upheaval in the pursuit of a risky revenue stream that would put the PC-free HP in direct mobile OS competition with high-flying Google and tenacious Microsoft. But it would be one way that HP could assert influence in client devices -- perhaps even a broader variety of them -- without being directly in the low-margin licensee business as it is with PCs.

If this is, indeed, the master plan, though, it's hard to imagine how it could have been implemented in a way to inspire less confidence in any three of the key pieces of HP, PSG and webOS. Imagine if, for example, Nokia had announced that it was sidelining Symbian and MeeGo without saying that it was adopting Windows Phone 7? Regardless of whether you agree with Nokia's new course, you can't well argue that it wasn't communicated authoritatively and extensively.

Ideally, this is the order in how things should have gone down at HP:

  1. HP continues to sell webOS devices while telling potential licensees privately that it is exiting the consumer hardware business. "By the way, how would you like to buy a really successful PC business?"

  2. HP finds a buyer for PSG or spins it out. HP announces this after the decision is finalized, maintaining clarity on the direction and ownership of PSG.

  3. HP announces that PSG as a new company – or the company that buys PSG -- will be among the new licensees for HP webOS. If an HP-liberated PSG really did not want webOS because it chose to, say, focus on Windows 8 tablets or was bought by a company committed to another mobile operating system, then HP could still move forward with announcements of other licensees and the continuum of supported webOS devices would not be broken as it is now.

Executing this is not as trivial as it sounds, with each of the three pieces of the webOS triangle representing billions of dollars in investment. But neither is the OS licensing business itself, where HP has less experience than it did building devices. The first question: if HP couldn't make webOS devices reach successful scale (the key capability former Palm CEO Jon Rubinstein cited during the acquisition) even after "doubling down," how can licensees?

As it is, while HP's webOS device exit clears pathways for licensing, those paths have now been cast in the dim light of developer uncertainty, a light that grows dimmer with each day that webOS -- the soul of a device -- saunters in search of a new host.

Ross Rubin (@rossrubin) is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.