Anyone that wondered what the week ahead in the world of Mark Zuckerberg might look like will be excited to learn that Facebook is planning to release its very own smartphone by next year. The New York Times quoted unnamed sources, including Facebook employees, who suggested Facebook has been talking to a number of manufacturers with HTC front-runner. Mobile is an area that Zuckerberg’s vast empire has been struggling with as they continue to try work out how to make enough money from it. Some observers even think of it as one of the reason why the share price plummeted and this move would show they’re really serious. How serious are they though?
An employee, quoted by the NYT article, states that Zuckerberg is “worried that if he doesn’t create a mobile phone in the near future… Facebook will simply become an app on other mobile platforms”. Developing a phone is quite obviously a very risky way to go about it. Entering any market where the dominant two players are literally huge would be hard enough in any industry. It just happens that Apple and Google, who make huge amounts of revenue from elsewhere, threw everything at the OS/handset market some time back. Facebook entering the market now, although ballsy, could be doomed to fail.
A safer move would be to come to some sort of agreement with either of the two and develop some sort of model that will make them more money via mobile. Trying to enter a marketplace with both Apple and Google already bossing it will be tricky. It just depends whether Facebook’s team of executives would be happy to swallow their pride and team up with one of the “other” sides.
If they do decide to go down the Facebook Phone route then it could be gambling’s back door into the world of Facebook. The waters regarding gambling on the network itself are very hazy to say the least but using a smartphone combined with the app store would give Facebook a chance to tap into another revenue stream. Combine this with the sales of the phone itself and revenue share from the app store and the worries over online advertising could be a thing of tomorrow.
All this is contingent on any phone they release being a success which is by no means a given. If they can get in bed with HTC or Samsung there’s more of a chance and with details so hazy, this is all just speculation anyway. It will be interesting to see how this one pans out and if a man in a hoody can take the smartphone world by storm. It’s safe to say hoody does go better with a phone than it does with Wall Street.
