Is Facebook dumb for wanting a smartphone?

Is Facebook dumb for wanting a smartphone?

Summary: Most agree that it is not a matter of can Facebook build a phone but should they? Zuckerberg seems to think so.

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The New York Times is reporting that Facebook is again trying to build a smartphone (again).

Based on the recent headlines, most are betting against Facebook’s phone success with headlines like “The Most ill-fated idea since the Palm Pre” from and TechCrunch’s Alexia Tsotsis’ writing, “It’ll be a miracle if the Facebook phone doesn’t suck”.

Most agree that it is not a matter of can Facebook build a phone (most agree they can’t) but should they?

Many are asking is there even a need for a Facebook phone? Mark Zuckerberg seems to think so.

Facebook is constantly optimizing, making the product better, while trying to increase their customer base. That may have been a good strategy when you only had the private equity folks to impress, but now that Facebook is publicly traded company they no doubt feel a substantial increase in pressure to grow the pie - rather than simply producing improvements or variants of their core product.

To live up to expectations and hype, Facebook needs not only to innovate, but to do so in a way that is transformational, bypassing adjacent opportunities altogether. Firms who are able to pull this off are very well rewarded (think of iTunes). Those who are not, well, they stand to lose a lot of money.

Much of the criticism leveled at Facebook is that they have no track record of producing anything like a phone. Hardware and software development are completely different endeavors with vastly differing skill sets.

To that end, Facebook has been reportedly hiring up former Apple iPhone and iPad engineers. While that may seem like a good idea, hiring former Apple employees resulted in both a very nice touchscreen smartphone and the death of the Palm Pre. A smartphone that I owned at one time.

Clearly to make money at the smartphone business Facebook will need margins like Apple or Samsung who fragmented the Android market. Both companies have been at the hardware game for years, and Facebook will be starting so far behind the leaders that whatever they produce will need to be a game changer.

All of this, I agree with. Facebook developing software, I can get behind. Facebook producing, selling and supporting hardware, well, they are just so far out of their league that it is improbable.

Regardless, many are suggesting that Facebook partner up with a hardware vendor. They already have the operating system which includes all of the basics, not to mention everything that comes from the recent Instagram purchase. But I don’t see Facebook as the partnering type. They are more apt to make an acquisition.

Like the recently completed the acquisition of Motorola Mobility by Google, I suspect that Facebook will soon announce the intention to acquire some hardware vendor.

Facebook certainly has the funds to purchase any number of small hardware providers, thanks to their recent IPO. The question is, which one? If you know any industry insiders, now is the time to buy them lunch and get the inside scoop!

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About the author: Gery Menegaz is an Executive IT Architect at IBM with more than 20 years supporting technologies in the financial, medical, pharmaceutical, insurance, legal and education sectors.

Topic: Social Enterprise

Gery Menegaz

About Gery Menegaz

Gery Menegaz is a Chief Architect for IBM with more than 20 years supporting technologies in the financial, medical, pharmaceutical, insurance, legal and education sectors. My Full-Time Employer is IBM. I write as a freelancer for ZDNet.

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18 comments
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  • Makes as much sense as a Starbucks car.

    One of the best comments I've seen regarding this subject said that because a lot of people like to drink coffee while on the road, Starbucks should come out with a Starbucks-branded car. Maybe MZ should contemplate what Tim Cook said last night about keeping a company focused.
    Userama
    • Like +1

      Facebook is really stepping into grounds it doesn't belong.

      What next? Facebook fast food? Facebook photo shops? The Facebook Store? Faecbook game console? Facebook digital photo frame?
      Cat333Pokemon
  • Just what the world needs...

    ...one MORE way for Farcebook to mine data from its users.
    It'sNotMe
  • Is Facebook dumb for wanting a smartphone?

    I wouldn't say they are dumb but I'm not so sure they are making their own smartphone. I'm still going with the theory that Facebook won't create their own smartphone but just improve the mobile features of Facebook.
    Loverock Davidson-
    • I agree

      with you once in a lifetime.
      The Linux Geek
      • Is this LG1 or LG2?

        I am pleased that you agree, if only this one time.
        gery.menegaz
      • Ditto

        I am agreeing with you, which is a rare. :D. Have a good day.
        Ram U
  • Who really cares?

    Let them do what thier board of directors authorizes. Everyone is criticizing Microsoft, primarily a software company, on wanting to build/brand a phone, why not FB? It makes no difference to me, a non user, nor stockholder. Let the stockholders/BOD decide which way the company should go that is what they are there for. I won't be getting one. What concern is it of anyone who reads this anyway?
    dhays
  • Hmm..

    Maybe they should learn to build a decent iPad app first.
    Synthmeister
  • Hardware partnership

    Yeah - a hardware partnership to put special software on a phone. I guess that was Apple's first attempt to get into the phone business with the Motorola ROKR....
    peter.bennett
  • dumb dumb and dummer

    Novell was the standard in networks and wanted to beat Microsoft. hmm

    Research in Motion wanted to beat Apple ...

    Stay focused and be the best at what you do best.
    cbc1@...
  • Facebook Phone?

    An all socal networking phone was already tried and was pulled from the stores in a couple of months. No one wanted it.
    rdw551
  • How much will the R&D be?

    So I ask myself why Facebook would want to spend all that R&D on a phone? I mean ad revenue could easily tank and many question the viability of mobile ads anyway. Even Apple is having trouble implementing ads into mobile. That's Apple! Facebook for me has started the beginning of the end for itself. Becoming public with a IPO has now put pressure on itself to make itself bigger and expand. I am not sure Facebook can successfully do that. Many are now even asking if Facebook is sustainable as it is?
    jscott418-22447200638980614791982928182376
  • HTC already did???

    Didn't HTC already make a Facebook phone or at least one with a facebook button. The HTC Status had a physical little button http://www.htc.com/us/smartphones/htc-status-att/
    microsoftmissionary
  • Facebook Should Buy RIM

    If they want to throw money way on a phone (or phone system).

    FB maybe able to utilize RIM's data and storage capabilities.
    Pronounce
    • Chemistry Concerns

      RIM culture is about keeping your data secure, so I'm not quite sure how this will play with Facebook's "shared data" ethos. Anyway, RIM has a bit more blood letting left before FB could make a smart move. Heck, the Zuckster can buy it out of his own cash pile when RIM gets down to the $3B - $4B valuation range.
      Tired Tech
  • Funny

    I'm not a rocket scientist, but how does Facebook accomplish gaining marketshare over Google when it is using a google operating system. That's like Ford comming out with a Ford Cameroe to gain marketshare over GM. Not even worth reading the article, headline says more than I need to know. LMAO
    raymondm4
  • Outsource

    Facebook could test the waters first by piggybacking off an established carrier the way Virgin Mobile has done with their service. You can tweak the devices with FB themes/skins without worrying about huge infrastructure costs. Does FB really want to deal with returned hardware and device obsolescence nightmares? Besides, if/when the experiment fails, FB can absorb the smaller staff count.
    Tired Tech