A lot of buzz on the interwebs today about Facebook’s apparent third effort to build their own smart phone, and people trying to dissect the reasoning behind it.
Nick Bilton, Facebook Might Have a Smartphone in Its Future - NYTimes.com
For Facebook, the motivation is clear; as a newly public company, it must find new sources of revenue, and it fears being left behind in mobile, one of the most promising areas for growth.
“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,” a Facebook employee said.
Facebook is going to great lengths to keep the phone project a secret, specifically not posting job listings on the company’s job Web site, but instead going door-to-door to find the right talent for the project.
But can a company that is wired as a social network learn how to build hardware? Mixing the cultures of hardware and software designers is akin to mixing oil and water. With the rare exception of Apple, other phone makers aren’t very good at this.
The biggest names in consumer electronics have struggled with phone hardware. Hewlett-Packard tried and failed. So did Dell. Sony has never done very well making phones.
“Building isn’t something you can just jump into,” explained Hugo Fiennes, a former Apple hardware manager for the first four iPhones who has since left Apple and is starting a new hardware company, Electric Imp. “You change the smallest thing on a smartphone and you can completely change how all the antennas work. You don’t learn this unless you’ve been doing it for a while.”
He added, “Going into the phone business is incredibly complex.”
Bilton suggests that Facebook could simply buy RIM or HTC as a shortcut on the hardware side.
Connor Simpson, Do We Really Need A Facebook Phone?
do we really need a Facebook phone? From Facebook’s perspective, the parts are there, and so is the demand. You’d be hard pressed to find a young person who doesn’t have the native Facebook app, Instragram, and Facebook Messenger already on their phones. It makes sense that they’d want to put something in the market that comes preloaded with all of those apps anyway, along with further Facebook integration. Plus, a Facebook phone probably may not help solve their current mobile problem. Facebook isn’t making any money from their mobile efforts. All of the Facebook apps are free, and they’re still trying to figure out ways to generate any significant income from their mobile efforts. They wrote in their S-1 filing that if users increasingly started to use Facebook on their mobile devices, they have no way to generate any meaningful revenue from those users. Charging upfront for a Facebook phone would generate revenue, but the real question is whether the cost to get a Facebook phone out would be too expensive to make it worth it.
There is a saying, generals spend a lot of time planning how to fight the last war and are therefore surprised by the new one when it occurs. In this case, Bilton and Simpson are focused on the current smartphone marketplace, the one dominated by Apple and Google, where social has largely been an afterthought, and where social capabilities have been provided by apps, like Facebook in a browser. (Leaving aside Apple’s partial integration of Twitter into iOS.)
The next war will be won by the players that build the best social experience into the guts of next generation smartphones. Social capabilities will be wired into the device at a foundational level, not at the application level. And this is why Facebook must develop its own operating system and mobile devices that run it. It must square off with Apple, Google, and, yes, Microsoft still has a chance, here.
What is amazing to me is that this goes largely unconsidered in these articles: the authors don’t really focus on what a social operating system means.
Smart mobile devices have unique handles for their owners — the phone number, email, and social signifiers (like @stoweboyd) — so, in the not too distant social future I could opt to follow a friend, like @gregarious, independently of applications. By doing so, my social smart phone would receive all sorts of updates from @gregarious — status updates, calendar posts, geolocal information, blog links — and my social O/S would attempt to handle this stream using whatever apps I might have associated with the various flavors of updates. But the fundamental follow would be managed in the O/S, natively.
Note that this could also work across different operating systems: @gregarious might be following me from a Google Android device, a Windows phone, or a Facebook phone. Each O/S might have different sorts of capabilities — Google might have Circles and Huddles, Facebook might have Pages, iOS might be based on Twitter esthetics — but the core functionality of receiving status updates and direct messaging would likely become universals.
At any rate, this battle is just over the horizon, and Facebook needs to build its offering as fast as it can, because Google, Apple, and even Microsoft have a huge head start.
(PS I still don’t understand why Apple doesn’t acquire Twitter, and really bake it into iOS.)
Update 1:03pm — Mathew Ingram weighs in, but never discusses the operating system battlefield.
Update 1:05pm Henry Blodget thinks a Facebook phone is a horrible idea, and after a long list of reasons — mostly saying hardware is harder than software — he closes:
Perhaps Facebook doesn’t really have any intention of building a full-fledged phone—perhaps it just wants to partner with someone like HTC or Samsung. But even then, all the same challenges apply.
Facebook already has an “operating system” for mobile—it’s called the social graph.
So instead of building a phone, which seems like a desperate move, Facebook should partner with every operating system and carrier and hardware maker it can to try to embed this social platform within every mobile platform. And it should build great apps to float on top of these systems. (And if Apple keeps giving it the brush-off, it should probably start by cozying up to Samsung, which is the only company giving Apple a run for its money).
Yes, everyone wants to be Apple.
But there’s only one Apple right now.
And Facebook’s chance of becoming the next Apple seems even smaller than Apple’s chance to become Apple was.
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.
