Tuesday, September 21, 2010

Why Facebook Should Stay Out Of Building Phone

Since Sunday, just two days ago, it became official that Facebook is working on its phone. In addition to TechCrunch and cnet, Business Insider has jumped on the bandwagon to report supporting evidence. While I watched how story evolved since Sunday morning, I couldn't help but wonder one thing. Is Facebook doing the right thing by entering mobile phone market? What might be Facebook's motivations for taking on the risk?

First on Facebook's motivations. Business Insider ran a story outlining what Facebook may be after. It's no secret that mobile application is a major component in Facebook user experience. 150 million mobile users and growing, mobile story is something that Facebook is deeply committed to (note Facebook Places which caters to mobile users).

As Facebook makes mobile app the critical user experience, it's increasingly butting heads with Google and Apple. Google is clearly working on its own social network strategy to take a bite out of Facebook user base, and Apple is keeping Facebook at arms length with their own launch of somewhat social Ping and Game Center. To counter these threats and make Facebook entrenched in mobile populace, Facebook wants to integrate social networking experience right into the phone.

Imagine your phone contacts, call log, and location information all integrated with Facebook status update. There are dozens of startups just around these areas, such as Twilio, Vroom from Vivox, Shopkick, etc. Threading mobile phone experience into social networking has many exciting potentials, not to mention opportunity to serve ads creatively. Facebook is the leader in social network space, and they have enough glow in public eyes to sell innovative way of interacting with our mobile phones to mass market.

But could Facebook phone work? Would it be worthwhile venture for Facebook as late comer into the market? I think the chance of Facebook phone gaining critical mass is low. Here are reasons why I think so:

1. Successful mobile phone needs major carrier's backing
What good would be to have awesome application without mobile network carrier? If it were to succeed as mobile phone, it has to have carrier's support and solid hardware. Both of these are not controlled by Facebook. They'll have to court Verizon, AT&T, Sprint or T-Mobile, and make sure the phone works well with the network. These are not Facebook's core competency today.

Is There A Spot for Facebook Phone
In This Battle for Best Mobile Phone?
2. Compete with iPhone design or Android's openness
Apple designed their own phone and OS, and iPhone's strength is richness of applications and elegant user interface. It will be difficult to compete with iPhone on user experience. On the other hand, there are Android phones, and their open platform. Allegedly Facebook is toying with idea of starting with Android as baseline -- that's gotta say something about Android's openness. But that's also what Facebook has to compete with. Unless Facebook phone offers compelling user experience, it will have to rely on third party applications, and openness of platform will be crucial to harness mobile application developers. It would be tough game for Facebook to beat Google and Apple.

3. Room for innovation is still vast in current mobile platforms
I believe that there are still many untapped improvements and innovations possible on albeit limited iPhone API and Google Android. If you have your core competency on social network, why not concentrate on what you are doing well? Although idea of mobile presence is interesting, but I think Facebook can do many more interesting things instead of diluting their focus. Plus, it will be difficult for either Apple or Google to deny Facebook the access to their platform. They understand social network is here to stay, and it's one of smartphone adoption drivers that they cannot ignore.

Jury is still out on whether Facebook will go ahead with mobile phone. We may never hear the official cancellation announcement from Facebook. After all, as far as Facebook PR is concerned, Facebook phone plan doesn't exist.


  1. I think you should have Android's "openness" in quotes :)


  2. Thank you for the link, Minwoo. I was not aware of all ifs-and-buts in Android's openness. I guess I need to start doing some coding to really find out what's going on on these platforms...

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