By Marlène Sellebråten & Katarina Chowra
Fresh rumours of a Facebook phone, codenamed Buffy – the Android and Apple slayer? – have resurfaced. Taiwanese cellphone maker HTC is said to be the vendor chosen to build the mobile device, according to AllthingsD. However, according to the news outlet, Facebook is not only talking to HTC but also to Samsung, the world’s largest smartphone vendor as of Q3 2011.
The extension of the Facebook Platform to mobile back in October – with or without the rumoured smartphone, for that matter – marks an escalation in Facebook’s ambitions in the mobile space. And by mobile space, we mean apps, search, digital advertisement and not least online payments. Facebook’s mobile platform supports iOS, Android and HTML5-based web apps. It also extends Facebook Credits, Facebook’s own payment system, to the mobile web. Let us keep in mind that Facebook today has got about 800 million users worldwide, of which 350 millions are accessing the social network via their mobile devices.
In our view, Facebook’s heavy backing of HTML5 is one of the most interesting news in the mobile web space this year.
There is today no established distribution channel for web applications, only keyword search. With its huge global user base, Facebook is indeed well positioned to become that marketplace. Distribution is the key success factor for HTML5.
The rumoured Buffy phone confirms where Facebook is headed. The application platform the phone is said to be supporting is ”a modified version of Android that Facebook has tweaked heavily to deeply integrate its services, as well as to support HTML5 as a platform for applications”, writes AllthingsD, citing sources familiar with the project.
The magic world here is not so much Android – although it is indeed relevant – as HTML5.
Developing a phone around Android would allow Facebook to deepen its mobile relationship with a fast growing number of end-users. But by going all-in on HTML5, Facebook would reach out to multiple OS and handsets. Support to the existing mobile OS is nevertheless crucial. Indeed, technically, HTML5 does not yet offer all the functionalities and advantages of native applications. In particular, native applications can take advantage of handset hardware in a way HTML5 as of today fails to replicate. Developers we talked to believe it will take a long time for HTML5 to become the dominant mobile platform. In our view, the support of players such as Facebook, Microsoft and even Spotify, will accelerate the take-off of HTML5.
Google’s acquisition of Motorola Mobility Services back in August (you can read Close to Market Analytics’ take on this here), Android’s extraordinary growth and Google’s launch of social network Google+, could potentially leave Facebook hung out to dry, with no control over either handset or platform integration and development. Let us also remember that Apple integrated Twitter in its newest handset – the iPhone 4S – not Facebook. Having said that, rather than an aggressive forward-looking strategy, Google’s and Apple’s actions in the social web space look more like defensive moves against the ever more almighty player: Facebook.
That Google, also a supporter of HTML5, is not pushing harder on the standard is somehow surprising. HTML5 should be their ultimate dream for all mobile services – since it supports their ad business. For Apple, who also supports HTML5, it is a different story altogether. Promoting anything else than native apps, at least at this point in time, would be like shooting themselves in the foot. The vendor has even been accused by developers of purposefully slowing down web applications. And last we checked, a mere 1 700 web apps were available from Apple’s web app store. Quite understandably, look not for the App Store’s blockbuster apps there.
Facebook’s developing a phone, and an app marketplace, has to do with keeping control and leveraging ad and search to a massive user database, while undercutting the current market leaders. Device market dynamics also show the growth and profit margin being higher with an end-to-end streamlined solution. By pushing a web based application platform and reducing vendor dependency, Facebook could even provide telcos with a helping hand. Although these may have to adapt by offering their subscriber base a premium mobile Internet experience, and possibly accept to become ”bit pipe providers de luxe” going forward, at least in the consumer space. As far as our discussions with telcos go, the prospect of yet another apps platform is however met with pragmatism, not to say skepticism.
Now one last thing: The very fact that a Facebook phone makes sense, does not mean that such a move will be a successful one for the social network leader. A seamless Facebook integration in a smartphone, coupled with a guaranteed high quality mobile broadband plan is, in our view, what many consumers are waiting for. Considering how Android took off out of nowhere, it feels like whoever gets this seamless integration right will manage to surf on that wave. For Facebook itself, the stakes are higher though: establishing itself as the mobile application platform of choice. An application platform with a strong focus on HTML5, and support for existing platforms Android, iOS and Windows Phone.
Marlène Sellebråten, Close to Market Analytics
In collaboration with
Katarina Chowra, Mobile Marta
Get in touch with the authors
Marlène Sellebråten, Close to Market Analytics
+46 702 955 551
marlene@closetomarket.com
Katarina Chowra, Mobile Marta
Katarina.chowra@mobilemarta.com
