A case for a Facebook/Android/HTC smartphone

Facebook doesn't necessarily need a phone, but with some help from others it could still benefit from one.

A developer and product management perspective needs to be added to the Facebook Phone debate. The concept of the Facebook Phone could be similar to the Google Nexus phone, which, since first being announced in 2010, has been updated by Google and co-branded with Samsung, LG and Asus. The Facebook Phone might even be categorized as the Anti-Nexus.

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Facebook does not want a phone; it wants more Facebook mobile user engagement and more contextual information about users to make its mobile advertising model more profitable. The problem with Android and iOS phones is that all of the contextual information, except exactly what is in the Facebook app and Facebook messenger, are outside of Facebook’s domain.

Everyone remembers Facebook’s replacement of individual’s email addresses with @facebook.com addresses. An Android/Facebook Phone could be a similar opportunity for Facebook to exploit. With a Facebook-branded Android phone, apps that conflict with Facebook usage could be de-emphasized or stripped from the phone. Some candidates are Gmail, Google Contacts, and Google Wallet. This could be an Android phone that does not need a Google account to function.

Facebook does not want to be in the phone business. It isn’t prepared to field a sales force and technical team to sell a phone to the mobile carriers around the world. If HTC is Facebook’s partner, it has much experience working with mobile carriers in developing marketing, subsidization and network certification programs.

And HTC is a good candidate to supply the phone to Facebook. HTC has been frozen out of Google’s Nexus program by Samsung, LG and Asus since Google’s first Nexus phone, the Google HTC Nexus One. According to IDC estimates, in the fourth quarter of 2012 HTC dropped out of the top five list of smartphone makers based on volume, though it placed number four for the year. What HTC needs is brand awareness in the highly competitive market, in which it is extremely difficult to differentiate smartly designed smartphones and almost impossible to step outside of Samsung’s shadow. Given Facebook’s consumer brand recognition, delivering a moderately priced, well-designed Facebook Phone is a great opportunity to co-brand a smartphone to draw consumers to HTC.

Two questions remain. Firstly, would the Facebook Phone be an unlocked device sold through Facebook, like Google sells the Nexus via the Play Store, or would HTC sell it through its network of mobile carriers? An unlocked device seems more likely. Second, what would HTC pay for Facebook’s brand?

From a developer’s perspective, since it made the decision to develop native apps, Facebook has built crack Android and iOS developer teams. Facebook won’t distract its team of Android developers with the task of maintaining a separate, forked version of Android. Where is the profit for Facebook to build a team to compete with Google’s Android team with a base-level open source OS? But what is likely is that Facebook with HTC’s cooperation can build a pervasive Facebook app that raises its prominence in comparison to other apps and acquires even more contextual user data at Google’s expense.

If Facebook is developing a pervasive app for Android, it will do so for the iPhone too. Given the availability of Android source code, Android is the right choice for iterating a first build of a Facebook Phone. Facebook will be able to iterate the design and perfect it, and then with a clear specification, Facebook’s iOS developers can take on the daunting task of replicating its function for the iPhone, without the benefit of source code and the challenges of the byzantine Apple App Store release rules.

On Thursday, Facebook will release either a co-branded Facebook/HTC phone (think Nexus 4) with a very pervasive and improved Android Facebook app with many of the typical on-deck apps de-emphasized or removed, or Facebook will introduce an improved Android Facebook app for which its developers employed every method short of modifying and rooting Android to make it preferable to other apps. This release will prioritize Facebook Messenger/Mail, Facebook Contacts, Facebook Wallet and Facebook Newsfeed over every other app. Given that app store technology is widely available, Facebook might even introduce a Facebook app store.

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