Last night I was talking with a VP who works at HP on the former Palm team. He told me they have 2,000 patents for webOS, smart phones, and TouchPad.
Now remember, Google paid $12.5 billion for Motorola Mobile, mostly to get their hands on the 17,000 patents that Motorla held. Now, if you just price HP’s patents at the same price, you come out with $1.48 billion. HP paid $1.7 billion for Palm. So that gets you pretty close to even.
But this VP told me that these patents are almost ALL for modern smartphones, while the Motorola patents included a lot of old stuff that isn’t relevant anymore. So, this patent portfolio could get a premium of, say, 2x what the Motorola patents did. That gets you up close to $3 billion.
And that’s JUST for the patents. They have a few other assets as well:
1. The team is still mostly intact (at least this weekend) and has many talented engineers who used to work on Apple’s iPhone (including the VP who was talking with me).
2. They have lots of UI expertise. webOS is still ahead of all the other smartphone UIs in terms of usability and multitasking ideas. My best friend, Luke Kilpatrick, who works on social media team at VMware, keeps showing me his Palm phone and making fun of my “old school” iPhone.
3. They were working on a 7-inch tablet, and a variety of other things.
So, in the war between Apple, Google, and Microsoft (really the others don’t matter too much to the future) how could the Palm teams reshape the mobile market?
Well, let’s assume Microsoft plonked down the $4 billion to buy this team and patents. They would rejuvenate their mobile team with fresh engineers, and give them even more patents to go after Google with.
What if Apple plonked down the cash? Same thing, only much of this team has already worked at Apple so knows the culture and could fit right in.
Google? Google could benefit the most because its UI is still the worst out of the three major players and it might benefit the most from the additional insurance of the patent portfolio.
One other thing, there was a report that said webOS ran twice as fast on an iPad than on HP’s own hardware.
He said that, while somewhat true, that was only a part of the OS and only some of the times. What they were looking at is the kinds of optimizations that Apple did to its graphics subsystems. He said that while working at Apple they did a ton of work on lots of small graphics areas, which is why the UI feels so “smooth” there. For instance, he said they spent a ton of time just getting a list to scroll at 60 frames per second. That was VERY hard to do, he said, and used it as an example of the kinds of optimizations that very few people outside of the engineers at these big companies understand and that even the press that reports things like “runs twice as fast” don’t understand.
It’s that kind of engineering that is about to be let loose on the world and the other companies know it.
“My phone has been ringing off the hook from recruiters,” he said, while saying that most of his buddies on the team will hang at HP until at least October to see what happens. He knows there’s still deep economic value in the patents and the people who are working on webOS and that if they band together they might get rewarded well.
But the clock is ticking and it’ll be interesting to see what the management does and how they shop around this team and patent portfolio.
One question: what if Facebook bought the team and Google bought the patents?
Now wouldn’t THAT be a hoot? Facebook needs more mobile engineers and could use a team of great UI and expert mobile engineers to build tablet and mobile apps.
We also talked about how the team could transform the TV business. “We were already thinking about that,” he told me. Seems the Google TV business would be rejuvenated by a bunch of new blood who knew how to make good UIs and fun hardware (even though they were always late to the market with the hardware there still is a lot of expertise on that team).
What do you think? Already there’s a crazy set of comments going on Google+.