1. It's a contract price. Prices of $.99 or even 0 are not unusual with a 2-year contract for devices costing a few hundred dollars. They're typically discounted $300-400 from the retail price. Saying that these phones are selling for 99 cents is like saying that Verizon is handing out the iPhone 4s for free. It's "free" if you commit to their service for two years. If that's your idea of "free", I can get you a free sports car, if you agree to sign a contract to buy gas for $1,000 a month for the next four years.
2. It's silly to call it the "FaceBook phone". It's an Android phone that comes preinstalled with a FaceBook app that can be downloaded for any other Android phone.
Good responds. AT&T pays a subsidy to the phone manufacture for all of its phones. To recoup some of that cost it normally charges $99 and up for a 2 year contract. It usually drops the price when competitors introduce a similar phones in the market place. FB Home also needs more work to compete. FB should focus on something similar to FaceTime or the Kindle Fire for its apps. The phone market moves very fast. It is testing thing different things to see what works best for the company. It will get there. The company is well positioned to provide integrated services to multiple companies but it has to figure this out.