Although Facebook’s IPO (Initial Public Offering) was called by financial experts a failure, Mark Zuckerberg’s monster company still has its sights set very high. With stocks falling and more than $17 billion lost off an initial $104 billion valuation, the social networking service might be looking to expand way off its comfort zone and into smartphone hardware manufacturing.
I know, you’ve heard the rumors before and you might already be familiar with the HTC ChaCha (aka the Status), or that rumored “Buffy” project that has been in the works for about a year. However, the newest report about the Facebook smartphone takes things to a whole new level.
According to Nick Bilton from the New York Times, FB is planning to launch a smartphone that is heavily integrated with its popular social network, and more so, to build the device from scratch. The HTC partnership might still stand, but then again, it appears that “more than half a dozen former Apple software and hardware engineers who worked on the iPhone, and one who worked on the iPad” have been recruited by Mark Zuckerberg. It is almost certain, therefore, that Facebook is gearing to build a smartphone on its own.
The botched IPO was a cold shower for Facebook bulls, and some analysts are predicting that things will go from bad to worse for Mark Zuckerberg's brainchild. But the company is still worth a boatload of money with just the social networking service and nothing else.
So, why would one want to risk everything and invest in a business that is so demanding, challenging, and competitive as manufacturing mobile phones? Some might say that Zuckerberg has gone mad and is having fits of megalomania. Others might call it a passing eccentricity and hope that the project will be once again abandoned.
We, on the other hand, think that Facebook must challenge itself and test its abilities in more than one area, if it wants to have any chance at remaining relevant in the next decade. And we honestly don’t see anything wrong with trying the waters with a smartphone, although it's obvious that Facebook might lose billions of dollars and consume priceless human resources in the process.
While NY Times is citing people from deep inside (employees of Facebook and “several engineers who have been sought out by recruiters there”), there are still a lot of questions to be answered about FB’s plans. Will the company manufacture a smartphone and have it run on a “conventional” version of Android? Will they attempt to build their own ecosystem on top of the hardware? Will they fork Android, just like Amazon did with the Fire?
The answers to these questions are the keys to establishing the company’s theoretical chances to achieve success. If FB will manufacture a smartphone that runs some version of Android, it will have a pretty good shot at selling a couple of devices, provided that it can make the respective gadget available at an affordable price tag.
We also see things going well for Facebook if the company will seek the help of an experienced manufacturer to co-brand the device, and slightly tweak Android to better integrate social networking.
On the other hand, if Facebook will choose to design a smartphone from the ground up and handle all the hardware and software themselves, it will be very difficult to come up with a truly competitive product. Apple themselves are not handling the entire process of manufacturing their devices, and we are talking about a company with huge experience in this area. If FB will in fact try to pull something like that without outside help, it will most likely lead to utter and complete failure.
If you need additional proof that Facebook’s mission would be an almost impossible one, take this statement from Hugo Fiennes, Apple’s former hardware manager for the first four iPhone editions: “Building isn’t something you can just jump into. 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.”
After buying Instagram for $1 billion, it became obvious that Facebook will be increasingly focusing on mobile. However, it’s still very difficult to say exactly what are the company’s plans in this area. There are a lot of ifs and buts surrounding a future Facebook phone, but one thing is clear nevertheless.
Technology enthusiasts will be treated with something new from FB in the not so distant future (NY Times is saying next year, earlier reports said by the end of 2012). As long as there’s a chance that this device could be special, we will hope for the best, no matter if we’re into Zuckerberg’s social networking service or not. After all, the smartphone market has thrived thanks to competition, and you can't have too much of that, can you?