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Does a facebook phone make sense? How about a platform instead?

INQ Facebook Phone

Rumours a plenty that there will be a facebook phone with claims that they are hiring ex-Apple engineers who worked on the iPhone. Other suggestions that they should acquire a hardware arm in a similar way to how Google acquired Motorola.

The reason for these rumours are that Facebook users are increasingly moving to mobile with almost 500 million people using facebook via mobile. Whilst saturation rates are high in the developed world, extension to developing countries would likely be via mobile as the phone increasingly becomes the first access point to the internet and web.

With all the momentum moving mobile, Facebook lose out on potential ad revenues and currently have not monetized from their smartphone apps or mobile presence. This leaves a huge potential revenue stream untapped and a Facebook Phone is one way that could be realised.

Analysts have generally been negative about the rumour -

“I don’t see a huge demand for a specific Facebook phone, for the single reason that Facebook is already available on every smartphone,” said Francisco Jeronimo, research manager at IDC.

“It is a hugely intensive undertaking to develop phones, because life cycles are extremely short particularly in the Android world; there is an awful lot of margin pressure; and you have to ensure that you are competitive every release. It is absolutely relentless,” said Blaber.

Whilst the hardware play is not in facebook’s realm of expertise, making a platform/OS may make sense here’s why -

  • No need to create, sell, distribute phone hardware. Rely on manufacturers to use the platform
  • Facebook already have an App Store. It’s a potential monetization route
  • They already have in-app purchases in the form of facebook credits. Tying it into mobile payments makes sense
  • PIM (Personal Information Management) apps already exist. Contacts, events(Calendar), messaging, photo gallery
  • Camera is already taken care of.
  • No one owns or drives HTML5 app development, or owns a store to make it easily monetizable or accesible. Facebook could lead this charge and own it.
  • A developer and app ecosystem already exist and it gives their developers who have not created mobile apps, and easy way to move their audience mobile without adding complicated hurdles that exist when using another platform.
  • Does not alienate other manufacturers, which provides potential access to more carriers.
Bring that all together and you have a potential way to go mobile, but who would be the manufacturers? As with any new entrant in the mobile world, it’s best to align with companies that are in a similar situation. A struggling manufacturer, a local manufacturer looking to break through internationally, a hardware company looking to move into mobile, a carrier who wants differentiation. 

It’s certainly food for thought.

Filed under facebook facebook phone facebook platform HTML5 Mobile