The social networking giant Facebook is currently planning to enter the smartphone world. Facebook is planning to release its own smartphone by 2013 in hopes of boosting its revenue in the mobile Internet market. Facebook has been very active in the mobile space recently – so far they have already acquired Instagram, there is speculation they are planning on acquiring the internet browser Opera, and now there is evidence that they plan on creating their own smartphone.
Facebook has been recently assembling a team of hardware engineers to build the new phone. The company has already hired more than half a dozen former Apple software and hardware engineers who worked on the iPhone. Facebook is currently integrated in most smartphones through its mobile app and add on apps called Camera and Facebook Chat. Last year, HTC released an Android phone that dedicated a huge portion of the phone to Facebook to offer consumers a deeper and far richer Facebook experience.
Facebook’s IPO filing states that out of its total 825 million users, 499 million actively accessed Facebook’s mobile products in March. The question is, could Facebook possibly make a profit from the cell phone business? If the phone is priced low enough, it has the potential to take a large position in the market. Think back to Apple – even though it’s near impossible to not think of them alongside mobile phones, they weren’t part of the mobile market until 2007. Fast forward to today and Apple totally changed the mobile market and shook up the Nokia’s and Blackberries. Point being, any company that has a strong consumer following and can deliver on a positive UI experience has a shot at taking market share because they are already in touch with their target consumer base. Consumers may be interested in the new device if it will be placed in the market at a really cheap price.
Facebook developing their own mobile device doesn’t come without pundits, however. Google markets their Android phones on the market for a cheap price as well, due to their extensive product releases. Also, how much demand will the Facebook phone really have if the Facebook app is already available on every smart phone? Facebook could possibly make money to subsidize the cost of their mobile devices through increased advertising exposure and usage that could come along with their own smartphone. Some analysts are arguing that Facebook building its own device isn’t logical considering competition in the smartphone market continues to be very high.
Time will tell where Facebook’s true fortune lies.