The New York Times reports that Facebook is planning to release a smartphone by 2013 and has hired former Apple employees who have worked on the iPhone and iPad.
This is not the first time we’re hearing rumors of a Facebook phone. Back in November 2011, a rumor claimed that the Facebook Phone existed and is codenamed “buffy”. Facebook had reportedly partnered with HTC to build these phones, which would be running a custom version of Android.
The NYT report claims that it would be Facebook’s third attempt to build a phone.
Employees of Facebook and several engineers who have been sought out by recruiters there, as well as people briefed on Facebook’s plans, say the company hopes to release its own smartphone by next year.
The company has already hired more than half a dozen former Apple software and hardware engineers who worked on the iPhone, and one who worked on the iPad, the employees and those briefed on the plans said.
Experts believe that Facebook could monetize on mobile devices better if it launches its own mobile phone (platform).
The chatter about the possibility of a Facebook phone has grown louder after it highlighted in the S-1 filing before the IPO, that the number of ads per user was dropping due to the growth of users using the site on their mobile devices.
“When you offer an advertising-based phone, you’re targeting all the users on prepay that are budget-conscious of their communications costs,” said Carolina Milanesi, a vice president and analyst for the Gartner Group. [..]
[..] After all, both Facebook and Google make their money through advertising. If the companies have the opportunity to continually put ads in front of people on a smartphone screen, you would think the only question left would be to pick the right ringtone that makes that ka-ching sound.
With Twitter being baked into iOS and Google+ being built into Android, it isn’t really surprising that Facebook wants to build its own phone. With negotiations between Apple and Facebook breaking down over deep integration into iOS, the social network desperately needs to figure out a strategy for mobile devices beyond just apps.
Mark Zuckerberg also doesn’t seem to be happy creating just apps for other mobile platforms as he does not have much control.
“Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms,” a Facebook employee said.
As Business Insider points out, Facebook seems to be slowly building the apps required for a smartphone such as the Facebook messages, Facebook Camera. It is reportedly interested in buying browser maker Opera, which would solve the problem of developing a web browser for the Facebook phone.
However, we don’t think building a Facebook phone for a company, which has very little expertise in hardware seems like the best strategy, especially if the motivation is monetization by showing users ads. We’re also concerned how this would impact Facebook apps on competing mobile platforms like iOS. We’ve already seen this not go in the favor of users. For example: Google hasn’t launched its free Navigation app for the iPhone as it wants it to be one of the unique selling points for Android-based smartphones. That seems like a good strategy from a short term point of view, but once Apple launches its own Maps app (along with a desktop version), iOS device users could end up switching to Apple’s maps app even on the computer. We don’t think alienating users just because they’re using other mobile platform will play out well in the long term.
It will be interesting to see how Facebook approaches this conflict of interest if it does indeed end up launching a Facebook Phone.
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