Facebook is not making a phone, but could be making a social device.
Facebook is not building a phone, we believe. Not because they don’t have the ability to, but because they don’t want to. A phone is an old device, and the social network doesn’t need calling or texting on their device.
There are two features that are, in some respects, the backbone of a phone: calling and texting. Both are being underused as we gradually move on from that old age and data is becoming the new feature smartphones are used for.
When Facebook say they “cannot see how a Facebook phone would work”, it is simply because Facebook already has applications and features on their service that match what a phone can do now.
In a sense, Facebook would be battling to make their services better while at the same time making sure people are texting and calling. So instead of a phone, why not a social device with a new Facebook UI.
The social device could be 4, 7, 10, 15 or even 20 inches, depending on what Facebook finds the perfect size. All they really need is a device that is capable of taking in data and having 3G/4G capability.
We believe Facebook will build this social device because they are sitting on a dump right now. Advertising is still a good source of revenue but less people are clicking advertisements and less companies are using Facebook for ads.
Their other revenue stream is gaming. Zynga has taken a nasty fall these past few years and has crushed a lot of Facebook’s gaming revenue. We suspect that other gaming companies may look twice before releasing content exclusively to Facebook.
So now Facebook are left with two stuttering markets, which is why their IPO went a little peachy. Now they must find another revenue stream that works with their social network.
Making a social device will allow Facebook to sell apps and content and share those purchases with friends. Facebook could make a unique UI that works perfectly with the social network, or obtain Android and skin it.
The whole idea of Facebook making a phone is odd, because phones are old and a lot of people don’t want a Facebook phone. But having the social network that you can share all your content on easily, well, that may be a different story.
Facebook sent out press invites saying “come see what we built”, lets hope it is the social device.