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Summary:

There’s little doubt that Facebook will unveil a new phone on Thursday, but the star of the show will be software, not hardware, in this battle between Facebook and Google for user engagement.

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On Thursday this week, Facebook is holding a press event focused on its mobile efforts. The “see our new Home on Android” tagline on the press invite is a not-so-subtle reference for what to expect, which should be two specific items: One focused on hardware and one on software. After months of Facebook phone rumors, some will focus on the actual hardware, but that’s not the big picture: Facebook’s software on other phones will have the larger impact.

The only way I can see being proved wrong on that is if Facebook reserves some must-have, “killer feature” for a Facebook-branded phone. The chances of that, however, are somewhere between slim and none.

Why? Because it really doesn’t benefit Facebook much to have a dedicated phone that offers a marginally better social networking experience; it won’t be enough to sell the phone. That’s why any phone unveiled at Thursday’s event is likely to be a showcase for the new software, much like Google’s Nexus phones show off the latest and greatest Android software.

What will the hardware look like?

Early leaks of the Facebook software illustrate this point. The build.prop file in a reported software dump of the Facebook phone yielded these hardware specifications when Android Police looked through the data.

HTC FirstIt shows an HTC handset with what I’d call medium quality hardware components, not flagship-level parts: A dual-core chip — I’d expect a clock speed no higher than 1.5 GHz — with 1 GB of memory, 5 megapixel rear camera, 1.6 megapixel front camera, no expandable memory and a 4.3-inch display with 720p resolution. As for what the phone may look like, the relatively reliable @evleaks Twitter accounts shows this boring press render.

In other words: A bland phone with cutting edge parts from around 6 months ago or more and one that few current smartphone owners will buy. People entering the smartphone market could be interested, but with so many other hardware choices, I don’t see a big seller here.

Even with a killer feature, it would have to outweigh the phone’s limited hardware in people’s minds because hardware is a longer term investment; especially in the U.S. where most people keep the same phone for at least 18 to 24 months.

Software is an easier way to expand reach

That’s why software will be the star of the show on Thursday. It’s highly likely that whatever new Facebook software the company debuts — most likely in the form of a dedicated home screen or customized app launcher — will be available for most other recent Android phones as well as Facebook’s own handset.

That’s where the opportunity is for Facebook: on the roughly 1.4 million Android devices activated each day; not on a custom smartphone that will likely be outsold by an order of magnitude by Samsung’s Galaxy S4, the new HTC One handset or possibly even Google’s own Nexus smartphones.

Speaking of Google, there’s a very similar mobile strategy between it and Facebook, although the two are taking slightly different approaches. Google has pinned its mobile future on Android as an open source platform that anyone can use. But the major handset makers also license Google’s core apps and ecosystem: Think Gmail, Google Maps, Calendar and the Google Play store for media and applications. What does that give Google besides licensing revenues? Information about users, which can then be sold or used for targeted ads; the very same “currency” that Facebook is looking for in its own mobile strategy.

Google vs Facebook: Two titans with the same mobile business model

Facebook isn’t a complete operating system platform like Android is, however. Instead, it’s a set of core applications and functions that sit atop a mobile platform, or platforms as the case may be with iOS, Android, Windows Phone, BlackBerry and the web. The approach is different but the end result is the same: Facebook is gathering data for mobile ads and services that will make it money.

At the end of the day, both companies are doing battle for user engagement. The longer you use Google services during the day, the more information Google learns about you. The same holds true for Facebook, which wants you logged in, launching its apps, interacting with friends, posting pictures, chatting and even making free voice calls. You are the product, not the customer, so while Facebook may be investing in a dedicated Facebook phone, the bigger investment is in you, regardless of which Android phone you use.

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  1. Excellent analysis, Kevin. Yes, it is a battle over dominating user engagement. In my opinion, Google has a lead here. And I doubt if the upcoming phone will be enough for Facebook to bridge that. I believe another area that the new Facebook application will target is increasing it’s hold on the ‘Connect via Facebook’ world. Anyway, looking forward to the announcement.

  2. Matt Miesnieks Tuesday, April 2, 2013

    Hi Kevin, based on the hardware spec, this could be a free phone. Along with FB’s current Facebook zero rated service in many countries, they could offer the phone + access to FB for free. That could be quite disruptive….

    1. Yup, it could be free to end users but someone’s got to pay for the data and the hardware. Can Facebook completely subsidize this? I’m not sure, although to be honest, I always thought Google may be heading down that path in the future. Great point and thanks!

  3. Justin Wearne Wednesday, April 3, 2013

    Although not yet reported, I think it’s a fair bet that Facebook mobile will have more than just dedicated software to browse Facebook.

    Here’s what I think it will be like…

    VOIP
    I am predicting integrated VOIP phone capability (in a way that will be disruptive to Telcos).

    PHONE BOOK
    Facebook and Phone contacts will become one and the same.
    Facebook will become “phone book.”

    SELF MARKETING
    If they do it properly, the launch will become viral because when one friend gets a Facebook phone all of their other friends will find out about it (there will be some automatic notification posted on the user’s wall when they first switch it on) and there will be some new cool functionality built in that will make it desirable for others to own it.

    SMS KILLER
    In may also have an alternative SMS system that will cut the Telco’s profitable SMS traffic.

    POWERFUL APP MARKETING
    In addition, App marketing will be a whole lot more powerful.
    I am predicting that Facebook will build in notification to others when somebody installs an App on their phone (makes it far easier for a new App to go viral).

    GLOBAL YELLOW PAGES
    Another really powerful feature could be the option for companies to publicly list their contact details and locations through having a corporate Facebook page that was searchable on the Facebook phone. Sort of a new Global Yellow Pages.

    Justin

  4. I was going to ask you why you think there is little doubt FB will reveal a phone on Thursday, because I don’t think it makes sense and so think there is a lot of doubt, but no need, you answered that question in the third paragraph and I think contradicting your earlier statement:

    “Why? Because it really doesn’t benefit Facebook much to have a dedicated phone that offers a marginally better social networking experience; it won’t be enough to sell the phone.”

    1. I’m not sure it’s contradictory, especially when Facebook has partnered with HTC prior; see the mention of the ChaCha phone in the post. It came to market even though it really wasn’t a top seller, i.e.; it didn’t really benefit Facebook.

  5. All good for the consumer market, but will we see an enterprise social vendor do the same for orgs ?

    http://successfulworkplace.com/2013/04/04/will-we-see-a-facebook-phone-for-the-enterprise/

  6. Great post Kevin

    1. Thanks, Yuvamani!

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