Facebook Phone: hoax or truth

“The Story is not accurate; Facebook is not building a phone… and is only looking for deeper integrations with some manufacturers.”

This clarification came from Social Networking giant Facebook amidst speculation of them secretly building a smart phone. The internet was abuzz with a new Facebook phone speculations from Sunday onwards (19 Sep) after TechCrunch published a story saying “Facebook is building a mobile phone……or rather, they’re building the software for the phone and working with a third party to actually build the hardware.”

While negating the story Jaime Schopflin, spokesman for Facebook, also said that the social network wants to move closer to the core of phones, mentioning approaches such as using software development kits (SDKs) and supporting the nascent technology standard HTML5  thus leaving a door open for deeper ties between handset makers and the social network.

Reasons why the story of Facebook building a phone made headlines

  • Facebook wanted to integrate deeply into the contacts list and other core functions of the phone. This is possible only if it controls the operating system.
  • Three high level Facebook employees and relatively new hires of  the company – Joe Hewitt (creator of Facebook’s iPhone & one of the creators of the Firefox web browser) , Matthew Papakipos (former engineering director of Google’s Chrome OS) and Erick Tseng (former Android team leaders) – are said to be secretly working on the project, unknown to most Facebook staff. Tseng even went on record in late July that  Facebook would be moving “towards a platform strategy…..All of that great social goodness that third party developers are now enjoying for the desktop Web, they might be able to enjoy for mobile apps…Facebook wants to bridge that physical phone experience to all that really great rich social data in the cloud.”
  • One more reason is the fact that Facebook actually asked inputs from hardware manufacturers and carriers on the feasibility on whether such a phone is viable or not.  It also made sense as it can act as major revenue boost for the privately held company before it moves towards the inevitable IPO
  • The concept of a native platform where it can deliver mobile ads and collect all of the revenue, instead of sharing it with Google etc. made perfect business sense and it would also explain why Facebook jumped with both feet into the geo-location business with Facebook Places.

Facebook Phone – Features Wish list

The thought of Facebook phone actually is quiet attractive in Indian context especially when India is one of the fastest growing region of Facebook.

  • In order to let as many people have a hand on the phone, we believe the company will price the model at an affordable price preferably in < 7000 so that it can compete with existing smart phones
  • One of the features that is expected in the Facebook phone is its integration of user’s contact data with Facebook profiles thereby enabling it to call contacts merely at a click
  • It can also add on with bill paying facilities through Facebook credits
  • An exciting prospect could be the face recognition feature capable of instantly recognising people in a Facebook photo and automatically “tagging” friends
  • Facebook can also launch really addictive applications on their Facebook site and when people are attached to it then can give that offering exclusively on the phone.

Challenges for Facebook

There are however two hurdles for a Facebook phone.

  • The smart phone market is already crowded with RIM, Apple, Google, Nokia etc vying for a piece of the pie, and a Facebook phone most likely wouldn’t catch significant market share
  • The proposition of Facebook phone attracted the attention of Privacy & Security crusaders as there is already rail against perceived breach of privacy by Facebook site as it is second only to Google when it comes to tracking every movement or personal information. Their stance is that it could share your location information with merchants and advertisers. It also can combine that data along with information about your likes, dislikes, the groups you belong to and the topics you comment on to build a very comprehensive portrait of you, which then becomes a product it markets to advertisers. It also can get into the data mining/background check business and sells this information directly.

If reports of Facebook phone are actually to be believed then the concept is now at a strategic inflection point. It could either go the Google Nexus One and Microsoft Kin way (two products backed by deep-pocketed companies and intrigued by the convergence of two huge trends-the growth in social media and mobile phones and both failing miserably) or Facebook could come up with something revolutionary perhaps using an existing mobile OS that will change the way we look at phones. This only time can tell.

Perhaps its half-billion global users could be the difference.

Note: This post is part of our Student Series that will feature perspectives from students across management institutes on Social Media

Views of authors are personal, and do not represent views of IndiaSocial or its partners.