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  1.    #1  
    Hi all,


    Take care,


    August 16, 2011
    H.P.-Palm Deal Looks Better With Time

    Hewlett-Packardís $1.2 billion acquisition of Palm last year suddenly looks smarter. Googleís $12.5 billion deal to buy Motorola Mobility this week, and the earlier frenzied bidding for Nortelís patents, have revealed the riches in mobile computing intellectual property. And H.P. snatched one of the most important troves for a price that now looks cheap. Yet, it could be challenging for H.P. to cash in.

    A big trove of patents allows the owner to demand royalties from rivals, prevent them from incorporating particular features or at least negotiate from a position of strength. On the simplistic metric of enterprise value per patent, H.P. paid about $750,000 for each of Palmís roughly 1,600, in line with what Apple, Microsoft and the others did for Nortelís collection. Google, meanwhile, paid slightly more than $550,000 for each of Motorolaís 17,000-plus patents.

    But all patents arenít created equal. For a time, Palmís products dominated the market for personal digital assistants, precursors to todayís smartphones. The company also later developed an innovative operating system for handsets.

    So its patents sit in the mobile device sweet spot, whether related to displays, interfaces or other features. On average, those should be worth more than the wider range of Nortelís or Motorolaís patents.

    Also instructive is that Palm in its heyday appeared to enjoy needling Apple, though Apple was hesitant to take Palm to court. That suggests some important intellectual property leverage compared with, say, Motorola, a company Apple has sued. Itís difficult to value patent portfolios but it seems likely the one H.P. apparently paid a full price for is now worth a good bit more.

    Mark V. Hurd, the H.P. chief at the time, said he was buying Palm for its intellectual property, not its smartphone business. But H.P. has yet to reap much benefit. Its underwhelming tablet device is a case in point.

    The operating system may yet gain traction, especially since H.P. has said it will bundle it with its computers and may license it out.

    But even if H.P. ends up an also-ran to Apple and Googleís Android, thereís always the option of another patent auction.

    High-Yield Hopes

    It has been a while since high-yield bonds really lived up to their name. With markets volatile, typical American junk bonds are yielding more than 8 percent. Thatís tasty for investors starving on the Federal Reserveís zero-rate diet and paranoid about getting whipsawed in volatile equities.

    Average risk premiums over Treasury yields for subinvestment grade credits fell as low as 4.5 percentage points in February when an economic recovery in the United States looked more assured and the European debt crisis averted. This spread is now 7.1 percentage points on average, for an American junk paper yield of more than 8.3 percent as of Aug. 15. Thatís tempting when five-year Treasuries yield less than 1 percent and the overall dividend yield on stocks in the Standard & Poorís 500-stock index is around 2.2 percent.

    Of course, junk bond yields have risen partly because investors have been withdrawing billions of dollars from risky corporate debt markets. Euro zone debt and slowing global economic growth are legitimate concerns. But traditional signposts for high-yield bonds suggest the sell-off has gone far enough to warrant another look.

    The annual default rate, for one, is expected to end this year at just 1.5 percent. Thatís hardly recession territory. In 2009, it surpassed 10 percent. A prolonged closing of credit markets would trip up some overleveraged companies. But the extensive amount of refinancing over the past two years means even CCC-rated companies donít face large sums of maturing debt in the near term.

    Only $5.3 billion of debt from such issuers will mature by the end of 2012, according to Fitch Ratings. At the end of 2008, roughly five times more was scheduled to be repaid over a comparable period.

    There also isnít a big backlog of leveraged debt deals to tax investor demand. Bankers estimate as much as $40 billion of buyout-related debt is in the pipeline. When credit markets shut down in 2007, the figure peaked at nearly $500 billion.

    Rising trouble in Europe could push prices still lower and yields higher. But with investors potentially stuck with the thin gruel of low official interest rates for a long time, high-yield bonds are once again looking almost nutritious.
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  2. #2  
    Alas, the only way for HP to fix the situation now is to announce licensees for webOS posthaste, otherwise I fear developers will once again put their webOS projects out to pasture.
  3. #3  
    Interesting. Take a look at this thread which says the TouchPad hardware was created by HP before they bought Palm, webOS runs twice as fast on newer hardware like the iPad

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