Facebook Could Transform Mobile Phones

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A Facebook device would open up new possibilities for creativity, too. We know that consumers more than ever carry around devices for creating and sharing content with each other. Instant and seamless uploads of photos and videos would create not just a master phone book but also a master photo and video album. Indeed, a Facebook phone could become your master life recorder—a kind of social archive of your digital life. It would transform the online and mobile landscape, reducing fragmentation and providing a level of integration among applications never before seen.

Such a device would undoubtedly terrify mobile operators, who could witness even more of their network traffic shift from voice and pricey messaging to raw streams of data. Incumbent handset makers could lose, too, as further control over the user experience shifts to an Internet company that stands to profit from dominating the online life of users. In short, a Facebook smartphone could spur a communications revolution. The sheer thought of the richness of interaction thrills me.

Need several years, better batteries

We are already seeing the first baby steps along this road as mobile operators begin to understand that their future will be dictated as much by users as by them. Vodafone 360 is an example of this, but Vodafone (VOD) lacks the digital life archive and engaged users that Facebook commands. INQ's Social Mobile also takes important strides in this direction. The Palm (PALM) Pre has done a good job in showing the way, and the active widget framework in Android provides the base. In the end, it's the service that will drive usage—and this could turn into one of the Internet's famous winner-takes-all scenarios.

Facebook has the sheer scale to take online and mobile social integration further. Surely, if the company continues growing at its current rate, its ambitions won't be limited to creating a social Web site. Facebook will look to emulate Amazon (AMZN) and Google as an "Internet hub." There's only one way this can realistically be achieved—by creating a Facebook mobile device. This will likely be a two- to three-year process that requires at least a $200 million investment and technological progress in rendering ubiquitous connectivity and longer battery life. We are, in short, about one hardware generation from this inflection point.

Facebook's ability to build its own device would rely on certain additional conditions. The company would need to double the size of its network, expand its developer community (including flushing out scammers), and then solidify its monetization program. It would also have to resolve the privacy issues that stand to threaten its "trusted brand" status if left unchecked. It would also have to execute this strategy in total stealth, while remaining in the meantime the best and friendliest partner to any enterprise wanting to integrate with it.

Make no mistake, Facebook has the assets to achieve all of this and more. It has the attitude and the talent—and can attract more of the latter now that it's generating a profit. A Facebook phone, if successful, would ratchet the company's income to a higher level, making it a prime global brand. The rewards for reinventing the phone would be massive.

Lindholm is a partner and director with Fjord, a leading European digital design agency.

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