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HP confirms sale of webOS software to TV maker LG

Palm, Inc.'s Palm Pre, the first phone based on the new Palm webOS mobile platform.


Hewlett-Packard Co. said on Monday that it is selling its webOS operating system to LG Electronics Inc.

LG will use the operating software, used in now-defunct Palm smartphones years ago, for its "smart" or Internet-connected TVs. The Asian electronics company had worked with HP on WebOS before offering to buy it outright.

Under the terms of their agreement, LG acquires the operating software's source code, associated documentation, engineering talent, various associated websites, and licenses under HP's intellectual property including patents covering fundamental operating system and user interface technology.

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HP will retain the patents and all the technology relating to the cloud service of webOS, HP Chief Operating Officer Bill Veghte said in an interview.

"As we looked at it, we saw a very compelling IP that was very unique in the marketplace," he said, adding that HP has already had a partnership with LG on webOS before the deal was announced.

"As a result of this collaboration, LG offered to acquire the webOS operating system technology," Veghte said.

Scott Ahn, President and CTO, LG Electronics, said the company will incorporate the operating system in the Smart TV line-up first "and then hopefully all the other devices in the future."

Both companies declined to reveal the terms of the deal.

WebOS had been developed by smartphone maker Palm Inc., which HP bought in 2010. WebOS is widely viewed as a strong mobile platform, but has been assailed for its paucity of applications, an important consideration while choosing a mobile device.

The software has languished at HP since the failure of 2011's WebOS-based TouchPad, which the company stopped selling after just seven weeks, citing poor demand.

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HP in recent years has struggled with costly acquisitions, management turnover, governance issues, and falling sales and margins from PCs, where the Palo Alto, California-based company still has the largest U.S. market share.

On the eve of the Mobile World Congress, a wireless industry trade show taking place this week in Barcelona, Spain, HP announced it would join Google's Android operating system with the launch of the $169 Slate 7, a 13-ounce device with cameras on both sides of the 7-inch screen as well as Beats Audio for improved sound.

Powered by Android 4.1 Jelly Bean, the Slate 7 offers Google Inc. services including search functions, YouTube and Gmail, as well as access to apps and digital content through Google Play.

HP also makes the ElitePad tablet for businesses, which is powered by Microsoft Corp's Windows 8.

The Slate 7 is part of a multi-year plan by HP Chief Executive Meg Whitman to turn around the Silicon Valley icon.

Shares of HP closed Friday 12.3 per cent higher at $19.20 on the New York Stock Exchange, a day after HP reported quarterly results and an outlook that exceeded analysts' forecasts.

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The company's market value has nevertheless dropped by nearly two-thirds since April 2010.

With files from Poornima Gupta and Jonathan Stempel

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