Some potential fates for HP's operating system

You’ve got to give Meg Whitman this: She isn’t one to pull punches. The Hewlett-Packard (NYSE:HPQ) CEO told a room of HP and Palm employees on Tuesday that she flat-out doesn’t know what to do with the webOS operating system — the platform that was the lifeblood of Palm’s mobile phone business and, at one time, HP’s future in the tablet and smartphone game. A report at The Verge (via Venture Beat) quoted Whitman: “It’s really important to me to make the right decision, not the fast decision.”

What might the right decision be? Whitman made the company-defining decision to keep Hewlett-Packard in the PC business after she took over as CEO in September. Can she somehow transform the Palm and webOS business into something profitable rather than a $1.2 billion noose around HP’s neck?

Here are three options for the future of webOS:

The Great Patent Sell-Off

HP is known to be considering an everything-must-go fire sale of the webOS business. Reuters reported Monday that HP, under the advisement of Bank of America, was looking to sell off the entire operation to whoever was willing to pay — and for significantly cheaper than the $1.2 billion it paid for it last year. Software company Oracle (NASDAQ:ORCL) was said to be in the running.

However, Whitman’s words on Tuesday suggest that a sale likely wouldn’t be immediate. Besides, HP might be better off selling webOS off in bits and pieces rather than as a package. Competitors Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) have spent billions snapping up mobile technology! patents from companies like Nortel in the past year. If HP still plans a full exit from mobile, a patent selloff might be the best way to recover its losses.

Go Budget

HP already admitted in August that it was being hasty in announcing a full departure from the mobile business. The TouchPad tablet, the flagship device for webOS 3.0, began selling out at retailers once it hit the liquidation price of $99. Whitman also intimated on Tuesday that while tablets definitely are back on the table, HP is mulling over whether to re-enter the mobile phone game since “things get more complicated if you add in phones.”

If there is any opportunity for HP to make an impact with webOS-based tablets and phones, it would be to make devices cheaper than nearly any other on the market. In other words, new $99 TouchPads and maybe even $49 non-contract smartphones marketed as stripped-down, durable, replaceable business tools. HP simply can’t compete with Apple, Google or even Microsoft if it tries to compete as a mobile ecosystem based around popular consumer support and app sales.

Strength in Numbers With RIM

Another rumored webOS buyer is Research In Motion (NASDAQ:RIMM). The embattled BlackBerry maker, watching its share of the global smartphone market shrink by the day, probably doesn’t want to spend a large sum on another bench-warmer brand, though. It’s not that RIM wouldn’t want webOS’ technology — RIM was part of the Apple-led consortium that bought up those aforementioned Nortel patents for $4.5 billion — but since the company only has about $3 billion in cash right now, a full acquisition wouldn’t be right.

A merger, however, might strengthen both companies. If RIM and HP decided to merge the BlackBerry and webOS businesses into a joint venture under the BlackBerry brand, they would have a markedly stronger base of technology on which to rebuild BlackBerry’s strength in the mobile market.

As! of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at?@ajohnagnello?and?become a fan of?InvestorPlace on Facebook.

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