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Facebook Reportedly Plans to Expand Portal Device Portfolio

Zacks Equity Research

Facebook FB is planning to expand its Portal portfolio despite privacy issues. Per CNBC, which cited statement of Andrew “Boz” Bosworth, the vice president of AR/VR, the company is likely to launch new variants of Portal in autumn this year.

Facebook’s Portal is a voice-controlled device with features like smart camera, speaker, digital assistant and most importantly, video calling.

The hands-free video call feature allows users to communicate with their Facebook and Messenger friends. The smart camera tracks movement and adjusts camera focus as users move around the place. Additionally, the speaker can minimize background noise, thereby eliminating the issue of proximity.

Launched in October 2018, the device is available in two variants — Portal (costs $199) and Portal+ (costs $349) — in the United States.

Moreover, Facebook has already announced its plan to expand in international markets, including Canada (beginning this month) and Europe (probably in the fall). Per engadget, the company is also bringing WhatsApp calls on Portal devices.


Facebook, Inc. Revenue (TTM)


Facebook, Inc. Revenue (TTM)

Facebook, Inc. revenue-ttm | Facebook, Inc. Quote

Per TechCruch, the new variant of Portal can be the “Ripley” device “that popped up in Portal firmware code late last year.” There can be other “new form factors” as stated by Bosworth.

User Trust Important to Boost Portal Adoption

Portal aims at private conversations that Facebook is giving a lot of attention in recent times.

However, the device’s adoption rate is debatable due to stiff competition in the digital assistance living space from the likes of Amazon’s AMZN Alexa and Echo devices, Alphabet’s GOOGL Google Home, and Apple’s AAPL Siri and HomePod.

Moreover, the lack of trustworthiness arising from the possibility of Portal being a snooping device is a headwind. Hence, we believe a variety of “form factors” is less likely to boost Portal’s adoption rate.

Notably, per a March 2019 NBC survey, cited by The Street.com, only 36% of Americans have positive opinion about Facebook compared with more than 60% for Alphabet and Amazon.

Nevertheless, the social media giant is taking several initiatives to boost user privacy. Per CEO Mark Zuckerberg, Facebook is taking help from experts to decide acceptability of content. The company is also working on making its products and services end-to-end encrypted and ephemeral, so that user information is not available for long.

In this regard, the WhatsApp calls in Portal devices will be encrypted. This security feature is expected to boost user confidence, particularly in the international markets.

Zacks Rank

Currently, Facebook has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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