Facebook's Heart Is Where the 'Home' Is, Profits Too
Whether it's with the company's own phone or with the unveiling of its new "home" feature on Google's
However, not everyone agrees on "home, sweet home." Some analysts are calling it a bad idea , while others are jumping for joy. Investors, however, are stuck in the middle. The prevailing question is, what does Facebook know about hardware, and does a new "Home phone" make sense?
But that's the wrong question to ask.
Facebook wants/needs to stay relevant. Evolve or die has been the mantra in tech for years. To that end, Facebook doesn't feel it has a choice but to fully embrace a phone and tie in its features, especially with more and more of its users migrating from desktop to smartphones. But, Facebook wants to make that experience better.
Before you say, so what! It's not only about the hardware, it's about mobility itself. And the fact that Facebook is now putting resources toward mobility is not a surprise. Last September, Mark Zuckerberg, while speaking at Tech Crunch's Disrupt convention, hinted that the same software integrations that Facebook has built for Apple's
Still, the street is not convinced that it makes good business sense, especially since Facebook is becoming "friendly" with chief rival Google. In a recent article , SaintsSense contributor, Tedra DeSue, made the following points:
"The smartphone space is saturated. Even the almighty Apple is facing stiffer competition from other players, especially Samsung. If Facebook built its own smartphone, what kind of realistic price point could the device have to attract consumers from its competition?"
"Also, I think the company would have to weigh the odds that older people would buy its products vs. younger people, considering they make up the bulk of its subscribers. Then you have to factor in the younger-people base is shrinking.
DeSue raises an interesting question. While monetization is indeed a huge question mark, I do wonder, though, can Facebook afford to not take the risk?
Remember, there was a point when the street was lambasting this company for its inability to monetize mobile. Today the company is willing to dive in head first. Yet, there are doubts. It doesn't make sense.
It seems odd to not (at least) give Facebook the benefit of the doubt here. And given Facebook's recent earnings report, which highlighted strong mobile adoption, this phone gamble just might pay off. Again, considering the morbid fates of desktop PC kings in Hewlett-Packard