Should Amazon buy webOS?

As soon as HP announced in August it was ceasing development of webOS — leaving the HP TouchPad and Palm smartphones out in the cold — attention immediately focused on what other tech companies might be interested in licensing or acquiring webOS. Early speculation focused on the likes of Samsung, HTC, Sony, and even Intel, but a new report from VentureBeat indicates the most serious contender might be e-retailing giant Amazon — although other companies are still in the running.

Would it makes sense for Amazon to invest in webOS now that it’s put serious development effort into Android devices?

The case for webOS

At first, Amazon’s reported interest in webOS seems nonsensical: The company has just rolled out its Android-based Kindle Fire ereader, which has already turned the Android tablet market on its ear with its $199 price tag (and an apparent $210 in parts, meaning Amazon is selling them at a loss). Why would Amazon consider another mobile operating system when it’s already using Android — let alone consider buying another operating system when Android is free?

First, consider that Amazon’s Kindle Fire is in many ways an Android device in name only: Check out the Kindle Fire product page and see how many times the word “Android” appears. The answer? Once, in a subhead for email apps. The fact that the Fire runs Android simply isn’t a selling point for Amazon, and it isn’t concerned with marketing the Fire as an Android device. Amazon has put its own highly customized user interface on top of Android, divorcing users from a “true” Android experience. The Kindle Fire is a content-delivery system with a Web browser, and its Android capabilities don’t even merit an also-ran mention. The Kindle Fire experience doesn’t have to happen on Android: It could just as easily be running webOS and most consumers would never notice.

Basing future tablets and mobile devices on webOS would also enable Amazon to innovate on its own platform, apart from whatever directions Google wants to impose on Android. Call it “Google freedom.” Google has been repeatedly accused of clamping down on Android device makers who want to push the platform in new directions, reportedly by restricting access to the latest builds and demanding rights to review tweaks to the platform. Amazon undoubtedly doesn’t want to be treated like a second-class citizen in the Android device maker universe, even though it’s suppressing the “native” Android experience. If Amazon were to acquire webOS, it would be more able to chart its own course without influence from a third-party OS developer.

Amazon may also gain some technical merits from a switch to webOS: Although it never really had a chance to succeed in the marketplace, webOS was nearly universally lauded for its multitasking and browsing experience, as well as its media capabilities. HP has already done most of the heavy lifting to move webOS from smartphones to tablets and other devices (like PCs and printers). Android has a lot of those same capabilities, but webOS has actually been around longer, and comes from the same folks who invented the PDA: webOS might be able to bring more capability to comparatively under-powered hardware, enabling Amazon to save money on manufacturing costs.

Another asset in a webOS acquisition might be former Palm chief Jon Rubenstein. During his tenure running Palm, he shifted the company from its encumbered Palm OS to webOS and launched what was considered one of the most promising smartphone platforms to date; if the company hadn’t run out of money, Palm could have been a major player in the smartphone space. During his days at Apple, Jon Rubsenstein is also the man who designed the iPod hardware and played a major role in turning it into the dominant digital media player. The man understands hardware, understands how to make consumers devices — which is exactly what Amazon is producing — and he’s already on Amazon’s board of directors. HP and Amazon are known to have at least discussed Amazon using webOS in the last year.

The patent angle

Of course, no major deals happen in the mobile technology world without patents getting involved, and Amazon’s apparent interest in webOS makes sense in two ways.

First, Amazon would either acquire or gain significant access to Palm’s stable of technology patents. Let’s not forget that Palm was the company that put personal digital assistants (PDAs) on the map, and later was on of the first makers of what we’d call smartphones today, so its patent library runs deep. When HP bought Palm back in mid-2010 for a whopping $1.2 billion, former HP CEO Mark Hurd stated outright that HP didn’t buy Palm to get into the smartphone (or tablet) business: it bought Palm for the patents. With all the patent litigation in the mobile world, Palm and webOS have been almost entirely exempt. If Amazon were to bank on webOS for future Kindle devices, it would likely be able to sidestep litigation over Android (with Apple vs. HTC and Google vs. Oracle currently being at the forefront). The deep Palm patent portfolio would also put Amazon in a strong position if the company ever comes to loggerheads with Apple.

Second, going with webOS would enable Amazon to neatly sidestep the patent licensing tax Microsoft seems to be putting on Android device makers. The Redmond software giant has been very successful applying pressure to Android device makers with offers to shield them from possible future litigation in exchange for per-device royalties. The latest Android device maker to fall is Samsung, joining the likes of HTC, Acer, and ViewSonic. Microsoft’s success has significantly tarnished the notion that Android is “free,” and ironically may put the company in a position where it’s earning more money from Android devices than Google does… or maybe even than it earns from Windows Phone devices, at the moment.