Gigaom

A Facebook Phone? Time for More Android Rumors


Mark Zuckerberg discusses the social-network site's upgraded features.

Photograph by David Paul Morris/Bloomberg

Mark Zuckerberg discusses the social-network site's upgraded features.

Looks like it’s that time of year again—the time when rumors of a “Facebook phone” pop up like tulips after a spring rainstorm. This time around, it was a cryptic announcement by the social network about a mobile event next week that set the rumor mill in motion: Since the invitation mentioned Android, the speculation is that the company will finally announce a handset that has full Facebook functionality integrated into it. It’s easy to see how this would help the social network build engagement and possibly monetize mobile, but do users really want one?

The invitation to the press event on April 4 said, “Come see our new home on Android,” and since Facebook (FB) likely wouldn’t have an entire press conference just to announce a new app for the Google (GOOG) operating system, expectations turned to something more: namely, the much-hyped Facebook phone. According to TechCrunch, the launch will see the social network introduce a device from HTC (2498:TT) that runs a modified version of the Android operating system and has Facebook’s news feed, photo uploading, messaging, and other features integrated into it.

Next to a full-fledged Apple TV, the “Facebook phone” is probably one of the longest-running rumors in the technology industry. The first reports started filtering out more than three years ago, when Om and others heard reports of an INQ unit that would run a modified version of Android and offer some kind of integrated Facebook functionality. The company released a device called the CloudTouch in 2011, but it went nowhere. HTC actually came out with a couple of phones that offered something similar, but neither did well, and the rumor mill continued to foretell the coming of the “real” Facebook phone.

Facebook Chief Executive Mark Zuckerberg categorically denied last fall that the company was working on a phone, but some saw wiggle room in his comments, since he seemed to be talking about Facebook actually building the hardware itself. Blogger-turned-VC MG Siegler wrote about the imminent launch of a true Facebook phone in January and said it was coming soon. But January came and went with no phone. Siegler says he now believes that the phone is coming next week and that it will be everything he said it would be: a dedicated device running a version of Android with Facebook built in.

As much as some critics of the idea—including our own mobile expert, Kevin Fitchard, who debated the idea with Kevin Tofel—question whether there is any point to Facebook releasing its own phone, it’s worth noting that the same kind of skepticism greeted the many reports about an Apple (AAPL) phone in the months and years leading up to the launch of the first iPhone. Too risky, many industry analysts said—no point in trying to enter a crowded market with commodity pricing, nothing to offer that would make it better than the existing players, etc.

Perhaps Mark Zuckerberg won’t be happy until he releases a phone and tries to break Apple’s grip on the smartphone industry. But it’s more likely the Facebook founder’s interest in a phone stems from a desire to capture users—and their all-important data—in as many different ways as possible. Zuckerberg has already stated that his interests are almost entirely focused on mobile, since that is where a growing amount of user activity is coming from. Owning the platform in some sense would make it easier to offer a user a one-stop experience.

At the moment, Facebook has a somewhat fragmented approach to the phone: There is the main Facebook app, but there’s also the Instagram app—which the social network acquired for close to $1 billion because it saw the photo-sharing community as a clear and present danger—the standalone Facebook messenger app, and its Poke app. The company seems to be trying to find as many entry points for users as possible to engage with the network, and a phone with more integration could help.

Owning a platform is the ultimate step in building a mobile walled garden: Apple is the obvious role model here, with its ownership of the app ecosystem and control over access to the device in every way, all of which has created hundreds of billions of dollars in market value. And both Google and Amazon (AMZN) are doing their best to own their own ecosystems, with Android and the Kindle platform—and even Microsoft (MSFT) has given it the old college try with the Windows phone. Facebook at this point is probably feeling left out by having to play ball with everyone else’s OS or device.

So Facebook’s interest in having such a device is fairly obvious. What’s less obvious is whether a large enough group of the social network’s users would be interested in having one. What would they gain? They can already have Facebook present on their home screen, and they can upload photos to it automatically in the background as they take them, and they can use Facebook’s messaging app instead of the texting feature in their phone—although increasing numbers of young users seem to be opting for SnapChat and other options.

In many ways, the release of a Facebook-branded phone—if that is in fact what the company has in mind for next week—seems more like a desperate move to recapture some of the relevance the social network used to have, especially with younger mobile users. Unfortunately for Facebook, that may be something that is beyond its abilities, no matter how impressive the device itself is.

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