No One Needs a Facebook Phone—Especially Facebook

That rumor's back. The one about Facebook making its own phone. Except this time the New York Times is saying it, complete with reports of former Apple engineers coming aboard to make Zuck mobile.

It seems more certain than ever that Facebook's going to vomit out a handset sometime next year. What a terrible idea.

Facebook Mobile

If you're thinking to yourself that a Facebook phone might actually be pretty appealing, let's take a moment to run down what apps the company already offers, free of charge: Facebook. Facebook Messenger. Facebook Camera. Facebook Pages, coming soon. Plus a perfectly robust browser interface. You have a Facebook phone. It's in your pocket.

But that's apparently not enough for Mark Zuckerberg, who according to the NYT 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." Don't get me wrong, that's exactly what Facebook is and will become. But what no one's mentioned yet is why that would be such a bad thing.

Besides, if you really wanted a Facebook phone? You already had a chance to buy one.

Status Symbol

Let's not spend too much time on the HTC Status, because it's not worth the breath. But if you're looking for a model of how a Facebook phone would be received by consumers, there's no better place to start. Released nearly a year ago, the Status featured deep Facebook integration, climaxing with Facebook Chat widget and a dedicated Facebook button for easy uploads and updates.

It was... okay.

The overarching point, though, is that the Status was redundant. There wasn't anything you could do with it that you couldn't also do with—at most—one more tap on your iPhone or Android device. Even more damning? It was a certified flop.

Need even more evidence? Look at Windows Phone, which integrates Facebook and Twitter so deeply, they feels like part of the operating system. No one's buying them, either.

It's Complicated

We've been down this road before. The first rumors of Facebook making its own smartphone surfaced in 2010, but never amounted to anything. Then in 2011 we heard that Facebook's "mobile special ops team" had crumbled in the face of its ambition. It was a demoralizing experience, AllThingsD reported at the time. They just couldn't hack it.

And that's always been the problem. You don't just wake up one morning and decide you want to make a smartphone. In fact, companies with far more hardware experience than Facebook have ended up either crashing and burning—Dell, Acer—or limping along—LG—on mobile. A social media company cranking out a smartphone is like Jif making a sportscar.

But set aside the tremendous technical hurdles for a second. Assume that Zuck's ex-Apple hired guns can get the job done. Success would bring Facebook an entirely new set of problems beyond just supply chain wrangling and marketing and carrier discounting and the entire host of logistical nightmares that Google can tell you all about.

The ubiquity of Facebook apps has made it the Switzerland of the mobile wars. Why raise an army? Why put that target on your back, threaten those lucrative relationships, when you're already terrifically profitable without it?

Oh, that's right. Investors.

Friend Requests

Regardless of whether it's a good idea, the simple fact is that Facebook may have to make a phone play, and make it soon. The Facebook of a few years ago could afford to feint at mobile, to have hardware pipe dreams that came up short. Who cared? It was only accountable to itself. It could try and fail as many times as it wanted.

Today, though, Facebook is a public company. Correction; Facebook is the public company, with the third-largest initial public offering in US history doubling as the biggest IPO fiasco in recent memory. The only way to justify its insane $104 billion valuation, to mollify investors who got hosed in the early days of trading? Grow. Quickly.

That growth could take place in a few areas, sure. But Facebook's already got 900 million users; that number will continue upward, but not explosively. The company can and will serve more ads, but that's just doubling down on its current revenue stream—which is more of a trickle than a geyser. For real, expansive, this-company-is-worth-every-penny type of growth, you need to pave new avenues for profits to roll in.

Consider, too, that Facebook's biggest financial weakness is in mobile; at a quick glance, a phone would be a good way to catch up quickly, to trap people in the Facebook ecosystem more efficiently. But if anything, all the razor-thin margins on smartphone sales would do to Facebook's financial health is to make it less profitable, with uncertain gains.

Unlike

The unfortunate truth is that to being a successful technology company has come to mean being everything to everyone. That's why Google has a social network, why Apple birthed Ping, why every hardware company has its own stupid cloud. It's dumb. But it's how the market has evolved.

And that's what Facebook is faced with now: A serious case of the me-toos. But just because a company thinks it needs to make a product—hello, 3DTV!—doesn't mean anyone wants to buy it. Sure, you could hit a home run. But you could just as easily end up like RIM, with warehouses full of unwanted products.

So what would a Facebook phone be? A hugely expensive gamble with limited upside, if you're Facebook. And for the rest of us? A portable meh.