FEB. 25, 2013 • Major South Korean consumer electronics manufacturer LG Electronics Inc. is buying the WebOS operating system source code from the Hewlett-Packard Co. The latter acquired the mobile phone system when it purchased Palm, Inc. in 2010 for $1.2 billion. Financial terms of the LG deal were not disclosed. LG is getting WebOS and will take on the “many dozens” of engineers who currently work on the operating system.  LG will also receive a license to the Palm patents involved, but HP is retaining ownership to the patents it acquired from Palm. In obtaining the source code, LG will have exclusive use of WebOS, but likely will not be able to further license its use to other companies without HP’s agreement. LG Electronics’s president and chief technology officer Skott Ahn told the Washington Post that WebOS would be used with the next generation of smart TVs from the company, as well as expanded to other devices like home appliances and smart cars where there is no dominant operating system already. Following that strategy, there are no plans at LG to use WebOs with its smartphones.

Impact: In theory, connected televisions should be a fantastic consumer product. In reality, consumers often gripe about on-screen interfaces that are difficult to navigate, and web apps that are slow to launch. Sometimes wireless keyboards work, often they work with some apps and not others, and other times the keyboards will work fine with one TV and not another. Furthermore, most manufacturers are not forthcoming on what WiFi and Bluetooth input devices will work with their products. The question has been what will these manufacturers do to make their smart TVs more people-friendly?

LG wants to help consumers get better control over their smart TVs.

Many of the major electronics makers are reluctant about getting too far in bed with Google’s Android system beyond mobile phones. There is the issue of being too dependent on Google, as well as the concern that if Android becomes the primary choice for connected TVs then what will differentiate the experience between products from different companies. In the latter scenario, the television manufacturer will be forced to adapt Android to its needs, a process that can make the user experience more unique, yet also lengthens the time it takes to integrate Google’s steady stream of Android updates into the modified Android code being used. While that may be less of an issue now for television owners than smartphone owners, as the use of TVs as Internet devices becomes more widespread, the need for timely updates will also increase.

Although consumers did not flock in droves to the Palm Pre back in 2009 thanks to competition with Apple’s iPhone, the WebOS that ran the device received high marks for stability and usability. Nevertheless, consumers were even less interested in HP’s subsequent line of WebOS smartphones and tablets when they were introduced in 2011. Although these were solid devices, they did not capture the imagination of customers – partly because HP had chosen to market them without Palm branding. Since then HP turned WebOs into an open source project in order to keep it alive, and created the Gram subsidiary to house the various Palm assets toward facilitating cloud services development and user experiences.

LG wants to make all of its appliances as smart as its TVs.

While there have been plenty of rumors about smartphone makers nosing around WebOS as an Android alternative (notably Samsung and HTC), until LG none of them actually pulled the trigger. As LG notes, there isn’t much sense trying to shoehorn still another OS into the smartphone wars. Smart TVs are another matter when it comes to operating systems. WebOS had strong multitasking features that could be very useful applied to connected televisions. If LG resists the temptation to rush WebOS-equipped smart TVs to market in order to concentrate on really getting the user experience right, this acquisition could put the company in front of its television competitors. There will still need to be a substantial investment in marketing and outreach to make consumers aware that they have a better option available to them, but the upside to LG could be substantial. That would be a win for consumers too, as LG’s competitors would be impelled to stop mucking around and get their own smart TV interfaces into a state where normal people feel less friction in actually using them.