Facebook to deliver a mobile phone?

Reports over the weekend from sites like TechCrunch were all alight about the possibility of Facebook having their own phone. Facebook have of course denied it, but what if it were true? What would happen if Facebook had their own mobile?

Well for a start it would make perfect economic sense. Many of the sites over the weekend pointed to Google’s Nexus One as the reason why it would be a bad idea. They have a point it didn’t do well in sales, and although Google have been very positive about it, it hardly set the World alight, but then it didn’t have to.  They had the Android OS and by the time the Nexus launched it was doing very well.

A Facebook phone would have to be less high-end than the Nexus, it would have to be very like the INQ 1 that is sitting next to me. A cheap and cheerful smartphone, that retailed at £50-90, and has one of the best social media integrations we have seen in a long time.

Anyway enough of the hardware, that’s a red herring. it’s not the hardware that really counts here it’s the financial model. And as far as we can see the model is a cut-down Xbox. A device that people buy, that’s either sold at cost, or as a loss-leader, and that creates a long-term revenue. For Microsoft that revenue stream is from licenses and software. With Facebook it wouldn’t be software, although there’s the opportunity if they want it, it’s probably not even the licensing, it’s the advertising.

Facebook has realised, what Google realised a long time ago, that they can make money from providing the goodies for free, and then selling off of the back of the products. If you have a big enough market, and boy does Facebook have a big market, then you have an enormous potential revenue.

Facebook has already provided it’s services free to users in the third-world with Zero 0.facebook.com and they’re not doing it out of the goodness of their own heart, it’s because they know, that over the life of that “free user”, they will make all of their money back, over and over again.

The only problem is that competition is tight in this market, and it’s a very fickle and fast changing market. If Facebook do bring out a mobile phone then they’re probably not going to have a problem finding a development partner, they’d be fighting them off, or a network partner, ditto,  and they’re not going to have a problem advertising it. But where they will have a problem is convincing enough people that they should dump their Nokia/LG/Samsung and replace it with a Facebook phone.

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