Facebook rumored to be building a smartphone again


We had to add “again” to the title or you might think that you we’re having deja vu, or that this was old news. In either case, you would actually be right! Rumors of a Facebook phone being in the works have been around since 2010. 

Apparently the highly secretive initial effort failed. This led to a second effort where they were forced to admit that they did not have the in-house capability to bring a new phone to the market from hardware to software. The attempt is a joint effort with HTC, and is still under development. Today, their hiring patterns make it look like they are building an in-house smartphone hardware team again, for the second time.

Necessary and smart strategy
Facebook is just a “social media company” to many people. In fact, former Google Eric Schmidt was even more dismissive, calling them an “identity provider”. Both titles are a bit demeaning since Facebook is really a communications platform. It only makes sense that they would move into mobile.

Unfortunately for Facebook they are languishing in the mobile space right now and desperately need to make inroads quickly, for financial reasons at the very least. Currently all their revenue comes from the web based version of the site. Users on the mobile version aren’t clicking any links.

Chances of success

Facebook clearly has a big hill to climb with this project, but it does have a few good things going for it.

  • An enormous, and often touted, user base
  • The “network effect” is full force, positively
  •  An app ecosystem (albeit web based)
  • Their own app store (with games and more)
  • A legion of developers
  • A guaranteed ton of free press upon launch

Facebook has changed how people communicate. For example, it is killing text messaging. But despite all the good news, big challenges lay ahead. Besides fierce competition in general, it faces these specific problems:

  • Mobile and web are very different, and Facebook might not be able to adapt to the cultural shift.
  • Smart phones are practically worthless without apps. Facebook has games, but not much productivity software. Also, they aren’t adapted to mobile devices.
  • Branding issues: Facebook might be too “cool” for serious business people, and arguably losing a little bit of luster among the younger crowd as well now that it is ubiquitous.

Until more details emerge, we won’t venture a guess on the chances of success or failure for the future Facebook phone. It seems doubtful that it will be able to go it alone, and some sort of partnership will be forged.

However we can say with certainty that the longer they take to release the phone, the more their chances of success drop dramatically as Apple and Google continue to grow their huge lead.

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