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Industry experts are torn on the idea that Facebook is building a social networking phone to compete with Google and Apple in the mobile Web.
TechCrunch ignited the blogosphere Sept. 20 when it reported the company was building a mobile operating system and other software to host on a handset made by hardware makers such as HTC or Motorola.
Google tried this approach with HTC. Google designed the Android software and other applications for the ill-fated Nexus One smartphone and failed trying to sell the device solely online.
Facebook denied that it is building a phone, providing a detailed explanation of how it provides applications and services that mesh well with devices, platforms and carriers.
Analysts polled by eWEEK offered different takes on the notion. Forrester Research analyst Charles Golvin said he couldn’t see any reason why a Facebook phone makes sense, noting that INQ and 3 failed to gain traction with their attempts at a Facebook phone two years ago.
“Facebook is already one of the most popular and highly used applications across all smartphone platforms,” Golvin told eWEEK.
“Those applications focus tens of millions of Facebook users at Facebook multiple times a day; why would a consumer want a Facebook-branded phone when their existing phone already connects them seamlessly to their social network?”
Ditto for Golvin’s colleague at Forrester, Augie Ray, who said:
“Since the world is not asking for a Facebook phone and there is no compelling technical reason for Facebook to have its own phone, the question becomes whether or not the Facebook name on a phone would help sell phones and generate revenue.”
“At this point, I see more compelling business opportunities for Facebook than launching their own mobile hardware.”
Altimeter Group analyst Jeremiah Owyang was somewhat more receptive to the idea. He noted that because Facebook’s mission is to extend profile information and social connections across the Web, it makes sense for them to create a mobile OS where their various existing primary features, and third applications can be built on top of and spread.
“We’ll know this is successful when consumers are able to dial their friends by using their Facebook address book,” Owyang said. “Expect Facebook to develop a mobile operating system and other software connections–not focus on hardware as the first move.”
Facebook Phone Might Be Better Served Soft
Independent analyst Rob Enderle found the move to be a bit of a Catch-22 that the advantage of taking the application route, which it currently does with mobile apps for the iPhone and Android operating system, is that the company ends up where people are. And that’s Facebook’s raison d ‘etre.
However, this is also means they are subject to the whims of the platforms of their competitors.
“By doing your own phone (with partners like HTC and Microsoft) you don’t strengthen your competitors and you can focus on the things you think a customer of yours might like and avoid increasing your competitors’ strength over them by your own actions,” Enderle reasoned.
“The difficulty is clearly that this is not a business Facebook knows and the strength of this will be in their partners. But who would have believed that either Google or Apple would be successful here a few years ago?”
Enderle, who said he would have to see the device to decide whether this is a good move, raises a fair point.
While RIM, Apple and Google have emerged as something of a three-horse race for mobile platforms in the United States, this market is still young and fluctuating. Just a year ago, the Android market share was barely worth mentioning and now it has set its sights on Apple’s iPhone share.
Perhaps what might be more useful for Facebook and its 500 million users in the near term is the addition of VOIP (Voice over IP) capabilities to the Facebook.com Website and mobile app itself.
Just as Facebook enables users to chat live with friends, Facebook could perhaps add calling and video capabilities, similar to Google Chat, Google Talk, Call Phones from Gmail and Skype’s multi-layered PC-to-PC and PC-to-mobile calling services.
Facebook might even try its own version of a phone management application, akin to Google Voice. This is the sort of functionality that Facebook users would embrace.
If the majority of users are socializing with family friends and colleagues through Facebook, the next logical step is to increase the communications capabilities from simple text messaging to voice and video contact.
That would satisfy users and keep them from going to Google for Web services Facebook doesn’t currently provide, such as Google Voice or Call Phones from Gmail.
Thus, a Facebook “soft phone” would be every bit as valuable as a branded Facebook phone.