Even though Facebook has officially denied “building a mobile phone,” it may be a technicality referring to the fact that they aren’t likely to be building any hardware for the phone. If we go with that definition, Apple doesn’t actually build iPhones, since the manufacturing is outsourced, but most people would agree that’s splitting hairs.
Also worth noting? Google, Apple and Microsoft have all denied working on phones, only to have phones eventually come to market. For Google, it was the Nexus One. Everyone knows what came from Apple’s not working on a phone rumors (a phone). And though Microsoft’s Zune phone never made it to market, they were working on it and eventually released the Kin.
Secrecy when working on a branded smartphone is nothing new, so the technical denials aren’t reason alone to doubt the rumors, but the more important question is if Facebook can make a phone that doesn’t flop.
Out of the previous examples, 2 of the 3 didn’t make it past the 1-year mark. Despite mostly positive reviews, the Nexus One was relegated to a developer phone after weak sales when Google’s try at selling the phone without an official carrier partner proved unsuccessful. The Microsoft Kin phones were killed off 2 months after launching, despite a promotion from Best Buy where the phone was literally given away. The flop of the Kin is what casts the largest shadow over the potential success of a Facebook phone.
The Kin phones were inexpensive, and targeted at young people who spend most of their time on social networks, but the expensive data plans never seemed to match up with the target market. There were internal politics which played a role as well, but the difficulties in getting everything to align – partners, pricing and platform – don’t bode well for the still in the works Facebook phone. While social networks make for popular apps, they’re still just features for many consumers.
There are things which could still make the project interesting, however. The team working on the Facebook phone has experience with operating systems, and even includes a former Android product manager. If Facebook pursues the phone as a test device for a Facebook mobile operating system, it would have to compete with Android, Apple’s iOS4 and Microsoft’s forthcoming Window’s Phone 7 platform. That may still give it better odds at success than trying to build a single iPhone or Blackberry killer device.
When Facebook opened their network up to developers, it was seen as a key to the massive growth and eventual domination that took place. Google already has the “open” thing covered with Android, but Facebook has proved successful as a platform for developers in the past. If they focus on the platform and can do it on one more device, there could be another serious contender in the smartphone competition.