My Thoughts Regarding the Possibility of a Facebook Phone

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For some time now, there have been rumors that Facebook is working on mobile phone. Just the other day another report surfaced claiming that Facebook is recruiting former iPhone and iPad engineers to work on the device. The report also claims that this is Facebook’s third stab at creating a phone over the past few years, after several other attempts have failed. But what if it works this time? What would a Facebook phone do to the mobile phone market? Here’s what I think.

Technology

I am not a software engineer, but I do have a perfunctory understanding and a great appreciation for it. That said, I do realize that it is a tremendous amount of work to create software from scratch. This fact lends credibility to an early report that Facebook would be using a stripped down version of Google’s open source Android platform as the guts of their operating system. For expediency this makes sense. The framework is already there; Facebook only needs to dress it up with their own features to make it their own. Then again, Facebook is not merely a social website, but rather a platform.* They obviously have expertise in building platforms. Why not make their own phone OS? They certainly have the money to hire the talent, and as long as these rumors have been circulating, they would have had enough time to build out a decent 1.0.

I can see hardware being another matter entirely. As the rumors suggest, Facebook is concerned with making their own hardware, and not just relying on third-party handset manufacturers as Android does. I commend them for this attempt. I think vertical integration of software and hardware makes for a better experience. With that in mind, Microsoft, a software company, has waded into hardware waters before. They’re only notable success being the Xbox. Would Facebook, a web platform company, be able to create successful hardware? Who knows, but at this moment, that is not their core competency.

Lastly, and possibly most importantly, is the question as to whether Facebook’s service’s are robust enough, and are in place to take over functionality for most smartphone features. Many of Android’s features are powered by Google’s web services on the back end. Sure, Facebook could have these features in development right this moment, and a few features such as chat, and the new @facebook.com email initiative are certainly paving the way for something more. But will their current (and any possible forthcoming) services be enough to prop up an entire proprietary phone and OS?

The Market

It is unquestionable that the iPhone and Android have a majority in marketshare and in profit share. Windows Phone and RIM’s Blackberry own small portions of the market. What would happen if Facebook splashed down in this mess? As I see it, one of several things.

First, the Facebook phone could be relegated to the same distant corners of the market that Windows Phone and Blackberry are holding. This would be due to a lack of traction in the marketplace, but a niche following nonetheless. In my opinion, Windows Phone is an excellent mobile OS. I don’t understand why it does not have a stronger following. This is one way things could be how things gel up.

Secondly, the Facebook phone could launch, and could eat everyone’s lunch. Especially with the teenage segment of the market. I doubt this, primarily if enterprise customers have anything to say about it. Then again, I suspect that Facebook is not targeting that market. Regardless, the Facebook phone could be a smash hit, and dampen everyone else’s growth in the market.

Lastly, and what I believe will be the most-likely scenario, I can see the a Facebook branded phone eating into Android’s market share. Granted, if the rumors are right, and the Facebook phone is based on Android, counting who’s market share this will cut into becomes more difficult. Will it be classified as something different seeing as it is Facebook-branded, or will it be lumped in with other Android phones? I think it will be the former, especially if there is a heavy coating of Facebook built-in throughout the system and they have their own custom hardware.

Summary

Overall, unless they really make it a fantastic device, I can’t see a Facebook phone catching on. Just look at Windows Phone. It’s great and it’s still struggling despite its merits. Besides, we all have Facebook’s (rickety) applications on our mobile devices. Plus, there are growing rumors that Facebook will be integrated into iOS at the system level, much the same way Twitter is already integrated. This further raises the question as to why someone would want a standalone Facebook phone, when all of their services are readily available on our phones already? The only way I could see things changing in Facebook’s favor, is if they have an ace up their sleeve in the form of a killer feature that will be exclusive to their proprietary phone. I’m not imaginative enough to foresee what that might be.

I am not dismissing a Facebook phone. I think competition is healthy, and I think Facebook’s interpretation of the mobile phone would certainly be interesting. I just see a company, even a powerhouse like Facebook, having trouble gaining traction in a market where competition is fierce even for those companies that have been in it for some time.

Have thoughts regarding a rumored Facebook phone? Leave a comment and let us know what you think.

*A similar situation to the early days of Google. At first it was a single service, but now it is a platform on which things are built.