The new Facebook phone. What’s the deal?

Facebook is announcing the launch of their first “Facebook Phone” today at 1pm.  Alot of buzz on this new gadget is filling the net.  I thought I’d weigh in.

What is it?

First its important for folks to understand that Facebook is not “building” its own phone.  They do not have the desire nor muscle to get into the device manufacturing business.  Apparently, this will be a new customized version of Android that will offer a fully immersive Facebook integration – its an Application Layer to the existing Android OS that essentially makes Facebook ( and all of its components) the interface for the user that uses the phone.  They are partnering with HTC to create this new version – apparently called the HTC First, and bring it market in a very opportunistic way.  They are looking to target the midlevel mobile phone users that do not currently own the higher end smartphones like iPhone 5 or Galaxy III –  these folks are more inclined to “upgrade” to a more affordable phone that gets them into the more sophisticated device market without hitting their wallets on the higher end phones that are out of reach.  This is a good strategy as this integration and device may be the impetus for these users to make that switch.   Plus these people tend to rely a lot on Facebook as a core social connection platform.  

Some background:

As we have seen over the last few years, Facebook has been building and acquiring a suite of Facebook components that all work as a part of the larger Facebook ecosystem:  Messenger, Instagram, Voice Calling, etc, and all of these sub-apps can be independently placed on both iPhones and Android phones today.   So, over time, Facebook has essentially been creating their own “replacement” apps for all of the core OS apps of iOS and Android – in an attempt to gain more user integration on an adhoc basis.   The issue for them in this scenario, is that due to their landlord/tenant status on iPhones and current Android phones they are subject to the laws inherent to being inside of a controlled environment.  What this new concept does is free them from those shackles and allows Facebook to be the main if only choice for users to perform their basic functions.  The thinking here is that a vast chunk of Facebook users are on the Facebook app for a majority of the time each day anyway – looking at their feeds, sharing updates, texting their friends and sharing and viewing pictures, etc.  This new device will make those functions the core of the experience.  The main screen will apparently look like a Facebook welcome screen and all of the user interactions will be done through Facebook’s platform.  

 So, why are they really doing this? 

  1. At the end of the day its data.  Data is Facebook’s mother’s milk.  The more user data that they can cull, the more targeted their ads can be and more revenue they can drive.  So, getting those other pesky interfaces out of the way allows Facebook to essentially be the entire data gateway for this device and hence will be allow them to capture ALL of the user data that is captured on the phone. 
  2. International and Emerging Market Penetration:  This new OS will also be used as a strategy to gain ground in emerging markets like India, Russia, China and Brazil, where feature phone usage is still the norm.  Putting a cheap device into those markets with a simple version of Facebook baked in will capture new Facebook users for the long term when computers and advanced devices are more prevalent.  These Facebook phone users will be hooked at this point and likely create online Facebook accounts once they have the means to in order to maintain the connections that they have established via mobile. Pretty slick. 
  3. Expose Apples weakness.  I don’t know if this is a defined strategy – but it makes sense.  Apple is know for its closed and controlled environment, hence this kind of partnership would not even be possible on an OS device.  Android is know for its open source customization.  Users may flock more to Android phones as this initiative exposes some folks to the limitations of Apples controlled platform.  Maybe. 
  4. Mobile is Facebook’s future-  and they know it.  Getting some kind of beach front in the mobile space was an inevitability and this approach makes the most business sense. 

Wil users care?  

Who knows?  I don’t – aside from my interest as a mobile professional, I don’t have enough of a reliance on Facebook to see this as a value prop.  But users who DO use Facebook as their primary tool set and are social citizens may buy in.  Assuming that there are enough people out there who have lower end phones and see this as their affordable upgrade opportunity (and it carriers and HTC can make it affordable enough for users to get in) they will likely bite.  Who knows?  Perhaps once this launch proves successful, Facebook has designs to bake this new OS into more advanced Smartphones ( like the HTC One Second? ) it may be a new offering in the smartphone display case.  

The event is at 1pm today.  I’ll see how right or wrong I am then.

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