Monday, May 28, 2012

The Facebook smartphone project rumor resurfaces

It's back again: the Facebook phone rumor, and with the social networking giant having just done its IPO (though not without issues), is it time for Facebook to actually become a hardware company?

The New York Times has reported that Facebook is making its own smartphone. The only problem with this report is it's been reported before, and never happened. That's, of course, just the first problem.

Still, according to the report, Facebook has already hired over half a dozen former Apple software and hardware engineers who worked on the iPhone, as well as one who worked on the iPad. Facebook hopes to release the smartphone by 2013, the report added.

The reason behind the move is obvious: Facebook needs to add new sources of revenue. Mobile is the future, and although Facebook is an app on various smartphone platforms, it doesn't want to "just" be an app.

However, the big question is: why would anyone buy a Facebook phone? There are already innumerable OEMs out there, and as is evidenced by how well (not) that Windows Phone is doing against Android and iOS, another new platform would likely be just another also-ran.

Facebook could, of course, leverage Android on its own device, adding in specific functionality that other device vendors couldn't gain access to. It could even fork Android, as did, but then it runs up against the wall of no Google Play (and no Amazon Appstore, either).

According to the Times, an employee told them that “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.”

It sounds more like a defensive move than an offensive one, if that's the case.  With the reports that Facebook's Q2 earnings are set to be weak, which is the information that was withheld from the public prior to the IPO, it all begins to make sense.

However, going from a software vendor to a hardware manufacturer isn't an easy thing to do. Facebook has had to admit that, rebooting the project several times as it learned it needed to bring in people with phone experience from the outside, instead of trying to learn everything on its own.

Facebook would also need to learn the complexities of dealing with wireless carriers. It would, moreover, need to learn to navigate the world of manufacturers, as it would need to partner with someone like, oh, Foxconn, to build its device.

Instead, it's suggested that Facebook should work with OEMs to embed their software in as many devices as possible, as Twitter managed to do with Apple and the iPhone.

If you think your Facebook stock has sunk significantly since the IPO, just wait until Facebook becomes a hardware company, says Business Insider, which added that "The fact that Facebook is even thinking of going into the hardware business is a bad sign. If Facebook actually does go into the hardware business, it will be a really bad sign."

No comments: