So Facebook is reportedly about to unveil a phone, built by struggling Taiwanese handset maker HTC, that has been modified to put Facebook and its various services in the foreground. Facebook has been working on this for years.
The business case for both companies is clear, in theory. Facebook wants people to use its services more. Perhaps it even wants its Messenger service to replace normal phone calls and text messages. (In the US and UK, it can do both.) More use means more opportunities for Facebook to advertise to people. And in the long run, Facebook needs a game-changing option—like perhaps a phone—to make enough money per user in order to ever become a business that makes a significant profit. HTC, meanwhile, is doing terribly and could use a boost from a partner with as much clout as Facebook.
The problem is, no one has any idea why users would want such a device. If you have a smartphone, you probably already have Facebook on it. Facebook is the most-downloaded mobile app in the world. Even if you don’t have a smartphone, you can get access to it.
Previous phones featuring Facebook, like the HTC Salsa, didn’t do so well. HTC
But here’s something no one seems to have considered. As we’ve seen before with Facebook’s sneaky—and yet massively successful—rollout in emerging markets, through a stripped-down form of the service called Facebook Zero, the company seems willing to play the long game in order to become as powerful as Google or Apple. And insiders at Facebook say that the company’s previous tryouts with mobile apps were merely “experiments” leading up to the launch of this “Facebook phone.”
So if this phone, which appears to be a slight re-jigging of the existing Google Android operating system on a typical slab-style smartphone, is simply another “experiment” for Facebook, then what is the company testing?
A phone as Facebook’s latest attempt to lock up emerging markets
How about an all-in-one messaging platform for emerging markets? Facebook has already convinced hundreds of millions of people that the web is Facebook. The cooperation of mobile-phone carriers the world over was key to that coup.
Aside from social networking itself, tie-ups with carriers are the one area in which Facebook is way ahead of Google, which only began experimenting with offering free access to its services, via collaborations with carriers, in November 2012. Facebook has announced Facebook-for-free services via Facebook Zero in 45 countries, and the number may be larger now. Facebook has also partnered with an array of companies, outlined below, to provide equivalent service even in markets not covered by Facebook Zero.
Some of the successful experiments in connecting to emerging markets already conducted by Facebook. Quartz
As we’ve reported previously at Quartz, “Of the 10 countries with the most Facebook users, six are emerging markets, and five of them—India, Brazil, Indonesia, Turkey, and the Philippines—represent 217 million Facebook users.” Facebook has also taken over in Africa, and in Indonesia, as we wrote then, “Facebook is literally becoming the internet.”
What all of these regions have in common, at present, is relatively slow connection speeds for mobile data. Given the phones that HTC normally makes, which are high-end smartphones, Facebook is probably offering its “Facebook phone” first in rich countries, where networks are fast enough to support voice calls over a data connection. But some day soon, most of the mobile networks in the world will be able to support phone calls via data.
But will carriers cooperate with a company that could wipe out a large chunk of their revenues by offering voice or video calls and text messaging for free? They may be reluctant, but there’s already a growing number of services, such as Skype, Google’s Gchat and Google Hangouts, and WhatsApp, that do that anyway. As these become more popular, the carriers may morph into providers mainly of mobile internet services. A growing share of their revenues is already mobile data.
At which point Facebook, with its experience in making customized Android phones and its many deep connections with carriers in emerging markets, will be perfectly positioned to start offering customers an all-in-one text, calling and social networking experience that could make sense in a way that it doesn’t, presently, in rich countries. You know, the ones where all the Facebook phone skeptics live.
Next, read this: How Facebook’s secret invasion of emerging markets will net its next billion users
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