{"id":1564,"date":"2012-06-08T01:01:23","date_gmt":"2012-06-07T15:01:23","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=1564"},"modified":"2012-06-14T11:02:20","modified_gmt":"2012-06-14T01:02:20","slug":"facebook-phone","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2012\/06\/facebook-phone\/","title":{"rendered":"Calling Facebook: Do You Really Need a Phone?"},"content":{"rendered":"

Rumours surfaced last week that Facebook is gearing up to launch its own smartphone. According to Facebook employees and others who spoke with The New York Times<\/em><\/a>, the firm has begun recruiting former engineers from Apple to bring its existing plans for a Facebook phone \u2014 codenamed \u201cBuffy\u201d \u2014 closer to fruition.<\/p>\n

The Times<\/em> article notes that Facebook is not the only software maker looking to develop its own hardware: While the social network giant was dealing with the fallout from its inauspicious late May market debut<\/a>, Google quietly completed its US$12.5 billion acquisition of Motorola, \u201cwhich could lead to the search giant\u2019s making its own smartphone.\u201d<\/p>\n

And while integrating software and hardware may be the ultimate goal for many tech companies in a post-Apple world, some observers are not convinced that introducing its own smartphone would be the right move for Facebook. \u201c[It] makes no sense at all \u2014 slightly more sensible than a Facebook dishwasher, but not quite as sensible as a Facebook toaster, which would alert all your friends every time you make toast,\u201d says Wharton marketing professor Peter Fader<\/a>. \u201cI can\u2019t imagine why they would want to get into such\u00a0a competitive, commoditised market, and what they would hope to get out of it.\u201d<\/p>\n

But Wharton marketing professor Eric Bradlow<\/a>, who co-directs the Wharton Customer Analytics Initiative<\/a> along with Fader, takes a different view. Bradlow notes that firms like Facebook \u201care realising that today, the \u2018point of entry\u2019 onto the web plays a big role.\u201d As an example, he cites Amazon\u2019s Kindle device, which the company sells to consumers for a price that is below its manufacturing cost. Why? \u201cBecause then the portal to Amazon products is at the touch of a finger \u2014 and the [customer lifetime value] for the person, despite the loss leader on the device, is still very positive.\u201d Moreover, Facebook needs to protect its long-term consumer base, he adds. \u201cImagine that everyone starts walking around with Google phones, then all of a sudden Google+ becomes the social network hub.\u201d\u00a0<\/p>\n

The bottom line, according to Bradlow and other analysts, is that as users increasingly rely on their mobile devices to connect to the web, Facebook needs to follow suit \u2014 or be left behind. In fact, prior to its IPO, Facebook conceded that the challenges of gaining traction in the mobile market pose a potential risk for the firm \u2014 an admission which some analysts believe partly accounts for the stock\u2019s dismal performance.<\/p>\n

According to Kendall Whitehouse, Wharton director of new media, it isn\u2019t clear that hardware is the only way for Facebook to balance the equation. Instead, the firm might simply need stronger mobile app development. He points to Twitter as one example of software that translates exceptionally well to a mobile environment, \u201cbecause its interface is simple and elegant.\u201d That\u2019s not the case for Facebook, which is crammed with features and has an interface that is anything but simple. His advice? \u201cUse the employees at Instagram\u201d \u2014 the mobile photo application firm that Facebook recently purchased for US$1 billion<\/a> \u2014 \u201cto develop a really good mobile app.\u201d<\/p>\n

This post previously appeared in the Knowledge@Wharton today<\/a>\u00a0blog: Calling Facebook: Do You Really Need a Phone?<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Rumours surfaced last week that Facebook is gearing up to launch its own smartphone. According to Facebook employees and others who spoke with The New York Times, the firm has begun recruiting former engineers from Apple to bring its existing plans for a Facebook phone \u2014 codenamed \u201cBuffy\u201d \u2014 closer to fruition. The Times article […]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-1564","post","type-post","status-publish","format-standard","hentry","category-innovation"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=1564"}],"version-history":[{"count":4,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1564\/revisions"}],"predecessor-version":[{"id":1567,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1564\/revisions\/1567"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=1564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=1564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=1564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}