Matt HealeySaturday,30 March 2013

The Snap

I saw this link on Facebook from Eva Au, a friend of mine from IDC. Facebook commissioned a study from Danielle Levitas, a VP of IDC consumer device research. I have worked with Danielle and she is a very good analyst and while I have not read the report, I suspect it is a very good document. The article, however, extends the findings to hypothesize about a Facebook Phone.

The Download

According to the article, Facebook is rumored to be working with HTC as its hardware partner. The phone would have a customized version of Android that would be optimized for Facebook. I can easily see why Facebook and HTC would be interested in this offering. Facebook is clearly one of the dominant players in the social media space. However, their mobile strategy has been called into question several times since the IPO. Further, HTC is currently 3rd in U.S. smartphone market share, according to comScore, and has declined 1.7% in the past 3 months. HTC needs to do something to revive their sales and compete with Samsung and Apple, or they will quickly find themselves going the direction of Motorola, Nokia, and Blackberry. They have already taken a first step with the HTC One, which has received good reviews and could put HTC back on the path of expanded market share. But given the fickle nature of consumers and the mobile device industry, I suspect that HTC is looking for a few more ways to expand sales, and a Facebook-optimized phone could help.

The problem I see is that I do not think that a Facebook-optimized phone will sell well. The reason for this is that one of the main attractions of a smartphone is versatility. Facebook may be one of the main apps that people use on their phones, but it is not the only one. From my perspective, the ability to use Facebook, Twitter, Gmail, Vanguard, Bank of America, Amazon, Trulia (we are currently looking for a house on Boston), Yahoo Finance, and a web browser is what makes the Samsung Galaxy a useful tool. One of the reasons I hated my Blackberry was that it was a phone and email device only. Granted it was very good for corporate email — probably the best device for that purpose that I have ever owned. The problem was that it was a one trick pony — corporate email. As the world moved from corporate-issued devices to BYOD/CYOD, consumers wanted more choices. That is currently the advantage that Apple holds — the ecosystem of apps. Apple currently has the largest number of apps and developers. This makes it challenging for other competitors and has led to Microsoft paying developers to write apps for the Windows phone. By developing a phone that is optimized to a single app — in this case Facebook — you risk the perception that it is a single app device competing in a world of choices. I do not think this will work.

Hat Tips

Facebook Phone, Eva Au, @dlevitas ,Danielle Levitas, Facebook Mobile, comScore, HTC One, MSFT Paying developers, Image Credit: Flickr

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