Sunday, February 14, 2010

Facebook Could Transform Mobile Phones

Facebook is clearly leading the pack in the mobile Internet race. In December—in Britain alone—it racked up 5 million mobile users, against 4.5 million for all of Google's sites combined. Google (GOOG) now has its own phone, platform, and app store; more Google phones will undoubtedly follow, offering—as with its new Nexus One handset—an experience tightly integrated with Google services. But given Facebook's ever-expanding size, many mobile industry analysts are asking how long the social networking giant will be happy to work within another company's idea of how a mobile device should look and feel.

For many consumers, social networks are now the nucleus of their online existence. Being always on is hard-wired into their lifestyle. The rise of the so-called "Continuous Partial Attention" phenomenon—the desire not to miss anything, even for an instant—holds profound implications for the way we consume information. It is the impulse that has us clicking "Check Messages" on our e-mails, even when we know that they auto-update, checking our phones even when we know they haven't rung or vibrated, and texting friends when we have nothing in particular to say.

We get a buzz from being continually connected. We're getting used to an existence where we are never fully off the grid. Many phones on the market today, including Apple's (AAPL) ubiquitous iPhone, do not fully cater to this demand. If you want to scan the horizon for information on an iPhone, you can either choose to put yourself at the mercy of push notifications, or run down your battery by repeatedly opening and closing the relevant applications.

The default experience of an iPhone is glossy and beautiful, yet it's a fundamentally static experience. In a real-time world where we have come to expect a constant flow of data—where we are always scanning for new opportunities to contribute, create, and collaborate—this seems somehow insufficient and unsatisfying.
Facebook: the Web's best contact book

Apple has created a new computer-like experience on the iPhone and many smartphones now mimic its approach. But the iPhone is incapable of multitasking. To get to Facebook's activity feed on an iPhone, you need to open an application. To get to Twitter, you need to open yet another app. To make a call, you need to close other apps and navigate to the Contact Book screen or the dialer. The Contact Book screen and the dialer do not communicate with the Facebook or Twitter apps—even though many of your friends are on Facebook. Frankly, it's inefficient.

Apple's decision to make the iPhone primarily a computing device, rather than a communications device, left open an opportunity for disruptive innovation. Apple's notorious obsession for locking down its platform and ensuring that such applications as Facebook can't be deeply integrated with the Contact Book and the Photo Album detracts from the user experience. The contact list is still the most important asset on the phone and, for many users, Facebook is the most important and complete contact book on the Web.

Imagine for a minute what a Facebook-centric device might be capable of. It would have the ability to incorporate real-time information about friends at every stage of your interaction with them. The need to send expensive SMS messages would be reduced or eliminated by the ability to send a Facebook message from your phone as easily as you now send an SMS. Facebook would be the trigger for greater communication.

A Facebook device would open up new possibilities for creativity, too. We know that consumers more than ever carry around devices for creating and sharing content with each other. Instant and seamless uploads of photos and videos would create not just a master phone book but also a master photo and video album. Indeed, a Facebook phone could become your master life recorder—a kind of social archive of your digital life. It would transform the online and mobile landscape, reducing fragmentation and providing a level of integration among applications never before seen.

Such a device would undoubtedly terrify mobile operators, who could witness even more of their network traffic shift from voice and pricey messaging to raw streams of data. Incumbent handset makers could lose, too, as further control over the user experience shifts to an Internet company that stands to profit from dominating the online life of users. In short, a Facebook smartphone could spur a communications revolution. The sheer thought of the richness of interaction thrills me.
Need several years, better batteries

We are already seeing the first baby steps along this road as mobile operators begin to understand that their future will be dictated as much by users as by them. Vodafone 360 is an example of this, but Vodafone (VOD) lacks the digital life archive and engaged users that Facebook commands. INQ's Social Mobile also takes important strides in this direction. The Palm (PALM) Pre has done a good job in showing the way, and the active widget framework in Android provides the base. In the end, it's the service that will drive usage—and this could turn into one of the Internet's famous winner-takes-all scenarios.

Facebook has the sheer scale to take online and mobile social integration further. Surely, if the company continues growing at its current rate, its ambitions won't be limited to creating a social Web site. Facebook will look to emulate Amazon (AMZN) and Google as an "Internet hub." There's only one way this can realistically be achieved—by creating a Facebook mobile device. This will likely be a two- to three-year process that requires at least a $200 million investment and technological progress in rendering ubiquitous connectivity and longer battery life. We are, in short, about one hardware generation from this inflection point.

Facebook's ability to build its own device would rely on certain additional conditions. The company would need to double the size of its network, expand its developer community (including flushing out scammers), and then solidify its monetization program. It would also have to resolve the privacy issues that stand to threaten its "trusted brand" status if left unchecked. It would also have to execute this strategy in total stealth, while remaining in the meantime the best and friendliest partner to any enterprise wanting to integrate with it.

Make no mistake, Facebook has the assets to achieve all of this and more. It has the attitude and the talent—and can attract more of the latter now that it's generating a profit. A Facebook phone, if successful, would ratchet the company's income to a higher level, making it a prime global brand. The rewards for reinventing the phone would be massive.


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  2. I read recently that a private investor had infused $200 million into Facebook, so perhaps they have found the funds they need to develop this new device.

    I agree that it won't be long before someone does it. Technology continues to improve geometrically. I can actually remember a time before cell phones. As a matter of fact, I recall the first mobile phone I ever saw. This was only about twenty years ago, and to be honest with you, I didn’t think they were going to catch on, because only a small percentage of the population was strong enough to lift one. It was as big as a brick and weighed about as much. It had an aerial coming out of it that reminded me of the antenna on the patrol car on the old Andy Griffith Show.

    Back then, the whole idea of mobile telecommunication seemed like a long shot. But now, look how far we've come.

  3. Nadia –

    This post is spot on; frankly, I’m surprised that Facebook has not yet teamed up with a smart phone manufacturer to develop a Facebook-centric mobile device. The argument that you have laid out for the need of such a device is thorough and sensible; however, I would add a few more points…

    Firstly, the good design people of Facebook have been very smart about growing with each design iteration of Facebook. A couple of years ago, Facebook made a major overhaul of the page layout by incorporating tabbed navigation. I remember people losing their minds, starting all kinds of groups pleading for Facebook to go back to its original layout – the problem of course was that as Facebook grew and began adding different types of apps, functionality and content types, the existing page design was cumbersome to wade through. It’s hard to imagine today Facebook without tabs at the top of the page for “Photos,” “Videos,” and “Groups.”

    Because there is so much content on a typical Facebook page, both in variation and quantity, it has gotten harder (WAY HARDER) to navigate through all the stuff on a mobile device. Currently, a single app can bring the Facebook “experience” to a user, but I would say it’s not a terribly enriching experience.

    The other huge issue, currently with Facebook on smart phones, is what happens when you have more than a few hundred friends. Feeds become bloated – and speaking from my personal experience – are almost useless. Trying to wade through 300+ posts on a device that has a screen the size of a credit card is not fun. A “quality” Facebook experience will probably not be realized until Facebook’s functionality and complexity is actually built into a particular mobile device’s operating system.

    Facebook is certainly positioned to pull something like this off. Much in the same way that Google has tried to consolidate/monopolize information gathering and organization, Facebook has the money and brand awareness to be the leader in social communication for years to come.

    There are at least two real obstacles that I see in a Facebook-centric mobile device. The first is how or if it could even break into the business world. While the iPhone is fun, it is still very much a business device. As we have discussed at length during this course, Facebook has barriers when it comes to acceptability in the business world. Granted, there is a huge potential market for a Facebook phone for the 17-24 demographic, but it would take a real yeoman’s effort to get Facebook to a level where you could put in a request for a Facebook Mobile to your boss and not get laughed out of the room.

    The second is how a Facebook phone could realistically compete without a legitimate and robust app store/catalog. Potentially any third party Facebook app would automatically work on the mobile device. While that might eliminate things like virtual flashlights and levels, it would assure users that anything that worked on the desktop version of Facebook would work on the phone – and it would be completely free.

  4. I like my phone to be a phone. I like sending text messages and I occasionally take pictures if I don't have a real camera with me. I admit to playing Bejeweled.

    But beyond that, I refuse to allow the internet, social media, navigation programs, videos, or games (beyond Bejeweled), even paid ringtones to infiltrate my phone.

    As a result, my cellphones last for five years. They get a little outdated, but I save a ton of money by standing up and saying, "No. You cannot have my phone. You may take over my computer and my life, but not my phone."

    Maybe if I was rich and didn't mind being scammed and nickle-and-dimed to death, I'd be willing to jump into the insanity.

    So personally, I wouldn't be interested in a Facebook phone. I think it might make a dent in the market, but I think it might come up against issues. For all the flexibility of applications and contacts on Facebook, it's yet to rival the quality of applications and hardware that Apple enforces. Facebook is already having privacy issues and I wonder how far it would go if they owned your cell phone. Could you limit the contact information that people see on other phones? What kind of quality-assurance do they really offer, other than telling us how things are changing and expecting us to accept it?

    Apple (and others) get a lot of criticism for limiting their platforms and forcing people to use their products and only their products. If Facebook is running the show, do you think they'll really allow you access to all of your other social media favorites? Facebook has already made it clear that it has big ambitions that users haven't even thought of yet.

    Maybe I'm distrustful. But if you thought cell phone companies were devious and evil, I don't think you've seen anything yet. Just wait to see how social media and businesses team up to make a profit off of their "free" services.