Bits Blog: New Phone by Facebook to Showcase Its Network

Valentin Flauraud/Reuters Facebook has been putting increasing focus on its mobile products for over two years.

8:45 p.m. | Updated

Facebook users post more photos, write more status updates and hit the like button more often from mobile devices than they do from computers. So it was almost inevitable that Facebook would introduce a smartphone that put its social network front and center.

On Thursday, Facebook plans to unveil the first smartphone created to showcase its social network. The phone, made by HTC, uses a version of Google’s Android software, according to two people briefed on the announcement, which will be made at a news conference at the company’s headquarters in Menlo Park, Calif.

The software is designed so that some of the core features of the phone, like the camera, will be built around Facebook’s services, according to one of the people, who is a Facebook employee. Both people briefed on Facebook’s plans spoke on the condition of anonymity because they were not authorized to discuss the product before the formal announcement.

Derick Mains, a Facebook spokesman, declined to share details of the event. But he said it would be a “significant mobile-focused announcement.” The invitation sent to members of the news media says, “Come see our new home on Android.”

For Facebook and any other online business that is supported by ads, mobile is a tough puzzle to crack. It is difficult to get people to look at advertisements on smaller screens, where display space is limited, without becoming too intrusive.

Facebook’s business strategy is to persuade people to congregate around its social network as much as possible and eventually show them more ads. That is why, over the last year, Facebook has been revamping its organization to be “mobile first.” Every team at Facebook is involved somehow in its mobile products. And the company has recruited engineers who specialize in mobile phone development, including former Apple employees who worked on the development of the iPhone.

The Facebook employee familiar with the announcement said that when the Facebook phone is turned on, it will immediately display a Facebook user’s home screen. A phone with a strong Facebook focus would prompt customers to use Facebook more than competing apps and services. But the success of such a device would depend on how much support the handset received from wireless carriers, said Chetan Sharma, an independent telecommunications analyst who consults for carriers. The carriers can choose which devices are sold in their stores, as well as how prominently to promote them.

“Unless the phone is in front of the consumers in stores, it’s hard to see how it will gain traction,” Mr. Sharma said.

He said it was difficult to imagine that big carriers like ATT and Verizon Wireless would place a serious bet on a Facebook phone from HTC, because that manufacturer’s other phones have not been selling very well. HTC once made a phone called the Cha Cha that had a button for posting photos directly to Facebook, but it sold poorly.

The idea of a Facebook-powered Android phone is not new. In 2008, Inq, a phone maker based in London, released a phone called the Inq1 that integrated Facebook services into crucial areas of the device. In 2011, it said it would release an Android phone called the Inq Cloud Touch, which had some of Facebook’s services integrated into the home screen.

But early last year, Inq pulled the plug on theCloud Touch, saying it would instead focus on other products. Frank Meehan, the former chief executive of Inq, said in an e-mail interview that the Inq had felt too threatened by Samsung Electronics, now the biggest maker of phones in the world, so it abandoned its plans.

“Samsung was already on a path to crush everyone, and we decided to get out of hardware and turned the company into software only,” Mr. Meehan said.

Mr. Meehan said that if HTC released an Android phone with a focus on Facebook, it would still face the problem that Samsung is the dominant player on Android, Sony is gaining traction in mobile and Huawei, a Chinese handset maker, is dominant in Asia. He said it would be better for Facebook to create a special layer that consumers could install on Android devices so the social network would embed more deeply into Android apps and Google services.

“I would see this as a more radical way of providing the social layer functionality on mobile that would really bring the power of Facebook to Android,” he said.

The Facebook employee familiar with plans for the new phone said the stand-alone mobile apps it released over the last two and a half years were essentially experiments to see what worked on mobile devices before rolling them into a Facebook-focused Android phone. This year the company introduced Poke, a private messaging service, as a stand-alone app. Last year, it released a camera app that specialized in tagging and uploading photos to Facebook. In 2011, it introduced Messenger, an app for free text messaging, which was later expanded to include free voice calls.

Facebook has been exploring making its own smartphone for the last two years. But the project, which was at one time code-named “Buffy,” had stalled because the company could not decide whether to make its own hardware or team up with a phone maker.

Facebook’s approach to modifying Google’s Android software is similar to Amazon’s, said a former employee of Facebook who had been briefed on the product. For its Kindle Fire tablets, Amazon removed Google’s apps and promoted its own services, like the Kindle e-book store, Amazon’s video service and Amazon’s own app store. The tablet is essentially an Amazon-powered shopping console.

A smartphone that gives priority to Facebook services is good for Facebook, but it is unclear whether that is something consumers want. Jan Dawson, a telecommunications analyst at Ovum, said the concept was “a solution to a problem that doesn’t exist.”

“There are lots of people who love Facebook, but I doubt if any of them feel like they need a more Facebook-centric experience on their phones,” he said. “There isn’t anything obviously missing.”

He agreed that it was unlikely that wireless companies would put much support behind such a device, because they are already worried about the way Google and Facebook are supplanting carriers in people’s minds as providers of content and communication services.