HP in Discussions to License WebOS Software, CEO Apotheker Says

Hewlett-Packard Co. (HPQ), the world’s largest maker of personal computers, is in discussions to license its WebOS mobile software, Chief Executive Officer Leo Apotheker said.

“We are talking to a number of companies,” Apotheker said in an interview in Beijing yesterday, declining to elaborate on details. “I can share with you that a number of companies have expressed interest. We are continuing our conversations.”

WebOS would give hardware makers a choice beyond Google Inc. (GOOG)’s Android operating system and Microsoft Corp.’s Windows software as they seek to challenge Apple Inc. (AAPL)’s grip on the smartphone and tablet-computer markets. For Hewlett-Packard, which cut its sales forecast by $1 billion last month, licensing the operating system would help strengthen software operations as PC sales slump.

“The reality is that Google and Apple are in the driving seat here and consumers are voting with their dollars,” said Shaw Wu, a San Francisco-based analyst for Sterne Agee & Leach Inc. He recommends buying HP shares and doesn’t own the stock. “The problem for HP here is how do they license it without competing with their own products?”

Hewlett-Packard, which makes and sells its own phones and tablets that run the WebOS operating system, rose 1.3 percent to a three-week high of $35.55 in New York trading yesterday.

Photographer: Keith Bedford/Bloomberg

Leo Apotheker, chief executive officer of Hewlett-Packard Co., second from left, speaks at a media event as Piau Phang Foo, senior vice president for global sales of Asia Pacific and Japan at Hewlett Packard Co., left, Todd Bradley, executive vice president for personal systems at Hewlett Packard Co., second from right, and Vyonesh Joshi, executive vice president for imaging and printing at Hewlett Packard Co., listen in Beijing, China, June 29, 2011. Close

Leo Apotheker, chief executive officer of Hewlett-Packard Co., second from left, speaks... Read More

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Photographer: Keith Bedford/Bloomberg

Leo Apotheker, chief executive officer of Hewlett-Packard Co., second from left, speaks at a media event as Piau Phang Foo, senior vice president for global sales of Asia Pacific and Japan at Hewlett Packard Co., left, Todd Bradley, executive vice president for personal systems at Hewlett Packard Co., second from right, and Vyonesh Joshi, executive vice president for imaging and printing at Hewlett Packard Co., listen in Beijing, China, June 29, 2011.

Apotheker declined to give a timeframe for deciding on webOS partners, saying “there is no time pressure to do this.”

Samsung Electronics Co. held talks to use WebOS in its smartphones, according to three people with knowledge of the discussions. Apotheker declined to say whether Hewlett-Packard and Samsung are having discussions, as did Jason Kim, a Samsung spokesman.

A partnership with Hewlett-Packard would allow Samsung, which uses Android for its Galaxy Tab tablet computers, to customize devices amid speculation that Google may restrict modifications for phones that use Android, said one of the people, who declined to be named because the talks are private.

Google, Samsung

Randall Sarafa, a spokesman for Google, referred to an April post on the company’s blog denying Android design restrictions, and declined to comment further.

“Samsung will continue to strengthen its relationship with Google to provide ultimate values to customers,” said Samsung’s Kim.

Hewlett-Packard is open to licensing its operating system if third-parties offer design and development improvements, said Jon Rubinstein, the executive in charge of developing WebOS, in an interview this month.

Apotheker, who told employees last month to brace for “another tough quarter” in the July period, said in March that HP plans to put WebOS into a broader range of products and ramp up output to more than 100 million devices a year.

Android may have recently experienced some defections among developers and consumers. In a June 20 report, Needham & Co. analyst Charlie Wolf said Android’s U.S. market share declined sequentially in the March quarter to 49.5 percent, from 52.4 percent. He predicted it will continue to decline, as more consumers opt for the Apple’s iPhone. Android’s global market share in the quarter increased.

To contact the reporters on this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Jun Yang in Seoul at jyang180@bloomberg.net; Olga Kharif in Portland at okharif@bloomberg.net; Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

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