Facebook just released its new Instagram like camera application that uploads directly to Facebook, has its own messenger service, and it's reported to embrace the mobile web browser developer Opera. But the social networking giant is not satisfied with its achievements and is looking forward to create its own Smartphone, the Facebook phone.
Instead of posting job listings for the Facebook phone online, CEO Mark Zuckerberg and his team are going door-to-door to recruit employees, according to the report. Zuckerberg is asking former Apple engineers with very specific questions about the iPhone, too — including the types of chips used.
Several engineers and Employees of Facebook who have been recruited by the Company well as say that the company hopes to release its own smartphone by next year.
The Facebook phone project has been rebooted a number of times because Facebook originally thought it could figure out hardware on its own. The company has since learned that it needed to bring in people with phone-making experience, several people said. So it is hiring hardware engineers to work with a phone manufacturer and design the shape, style and inner workings of a Facebook phone.
This is the third iteration of Facebook's smartphone plans--from hardware to softwareand back to hardware again.
In 2010, the blog TechCrunch reported that Facebook was working on a smartphone. The project stopped due to development complications, according to people who had worked on it. The Web site AllThingsD reported last year that Facebook and HTC had entered a partnership to create a smartphone, code-named “Buffy,” which is still in the works.
“Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms,” one Facebook employee said.
This past week, Google acquired the hardware maker Motorola Mobility for $12.5 billion, which could lead to the search giant’s making its own smartphone.
For Facebook, the motivation is clear; as a newly public company, it must find new sources of revenue, and it fears being left behind in mobile, one of the most promising areas for growth.
But can a company that is wired as a social network learn how to build hardware? Mixing the cultures of hardware and software designers is akin to mixing oil and water. With the rare exception of Apple, other phone makers aren’t very good at this.
The biggest names in consumer electronics have struggled with phone hardware. Hewlett-Packard tried and failed. So did Dell. Sony has never done very well making phones.
“Building isn’t something you can just jump into,” explained Hugo Fiennes, a former Apple hardware manager for the first four iPhones. “You change the smallest thing on a smartphone and you can completely change how all the antennas work. You don’t learn this unless you’ve been doing it for a while.”
He added, “Going into the phone business is incredibly complex.”
Facebook also faces hurdles, often of its own making, on mobile. Twitter, for example, is fully integrated into the Apple iPhone and allows people to seamlessly send Twitter messages with photos or article links. Facebook, which has had a contentious relationship with Apple, is still not integrated into iOS.
Hardware is a low-margin business: The only two companies that are doing well right now in hardware are Apple and Samsung. Both have been making and selling hardware for decades. Lots of other companies that have been making and selling hardware for decades such as Research In Motion and Nokia are struggling.
Start from the beginning: Samsung may enter the platform game, Amazon has entered the platform game. Microsoft is desperate to create its new Windows mobile product. RIM still has a share. If Facebook really wants to build a brand new mobile platform, it will be starting from miles behind the leaders.
Apps: Facebook is already available on all the gazillion phones as an app or via a browser. Why would anyone want a dedicated Facebook phone, especially if it didn't run all the apps that run on Apple and Android phones?
Despite the difficulties, Facebook seems well positioned in certain ways to enter the smartphone market. It already has an entire operating system complete with messaging, calendar, contacts and video, and an immense app store is on its way with thousands of highly popular apps. There’s also that billion-dollar camera app, in the form of Instagram.
If Facebook fails with its own team of engineers, it could buy a smartphone maker. The company took in $16 billion from its I.P.O. It could help them in buying company like Research in Motion, which is valued at less than $6 billion, and drop a beautifully designed Facebook operating system on top of RIM’s phones.
It would not necessarily be Facebook vs Apple in the smartphone marketplace. Instead, it could be Facebook vs. Google, which makes the Android operating system, with both companies going after a huge number of buyers of lower-priced smartphones.
Carolina Milanesi, a vice president and analyst for the Gartner Group said that at a mass market level, both companies could take the same approach as Amazon, offering low-cost hardware, like the Kindle, and subsidizing some of the costs through advertising.
Another alternative is Facebook can strengthen its already existing "operating system" for mobile-- called the social graph. So instead of building a phone, which seems like a desperate move, Facebook can partner with every operating system and carrier and hardware maker it can and embed this social platform within every mobile platform and build great apps on top of these systems. It can also cozy up to Samsung.