Should Facebook create its own phone?

Facebook is said to be collaborating with HTC Corp. on releasing a mobile phone in mid-2013, according to an anonymous source, Bloomberg reported. Neither company has commented on the news.

For the owner of the largest social network, it is high time Facebook considered reaping profits from mobile. Last year, none of the US$3.15 billion advertising sales of the company came from ads on phones, given that half of the 900 million users access Facebook via mobile devices.

Lack of profit from mobile advertisers has dragged the stock of Facebook down by 23 percent since its initial public offering on May 17, Bloomberg added.
“We think every mobile device is better if it is deeply social,” Facebook said in a statement, according to Bloomberg.

However, this doesn’t necessarily mean that social is better if it is deeply rooted in a new mobile device. Doubts have arisen concerning Facebook is heading for a wasteful direction by working on a Facebook phone.
“Although social is a key part of today’s mobile life for many consumers, only a sub-set of users would actually want a phone that totally centers on social networking,” Carolina Milanesi, an analyst for Gartner, wrote for the BBC.
Facebook has assembled a team of former Apple programmes to improve its iPhone application and is developing a modified operating system for the device. “Facebook relationship with Apple has never been better…and I’m sure they are working to better monetize their apps. But by building a phone, they are going head to head with Apple and Google, fighting much more established products in untested waters, rather than collaborating,” Billy Gallagher commented in Techcrunch.
In Gallagher’s point of view, Facebook would do better if it spent its resources elsewhere instead of directly competing against Google and Apple “in every theater.”

“Jobs didn’t lead Apple into social for a reason. Google hasn’t done that well, comparatively, with social. Twitter isn’t in hardware, presumably for a reason,” he pointed out.
Perhaps that’s why Facebook is working with HTC.
Previously, Evan Niu commented on a possible phone debut that “Facebook will need to deploy extensive engineering efforts that it doesn’t have, enter the consumer electronics space where it literally has no experience, find manufacturing partners, forge relationships with wireless carriers that are notoriously difficult and controlling… all for a minuscule chance that it finds but a modicum of success.”
Cooperating with HTC, Facebook might foresee a win-win situation. Not only the formidable obstacles aforesaid could possibly be solved, HTC can also save it self from the now troubled position. The share price of HTC has dropped 8.9 percent since last year, according to International Digital Times.
Before HTC and Facebook have collaborated in bringing to market the HTC ChaCha and the HTC Salsa, with disappointed performance of sales. “You can bet that HTC and Facebook are thinking everything they can do to avoid a repeat,” the Slashgear noted.

Image: Slashgear

This entry was posted in Facebook, HTC, mobile advertising, Mobile apps, mobile device. Bookmark the permalink.

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