When it comes to the article's touted benefits of deep integration in the OS - calling a friend, deep syncing contacts, etc, Android does it all already.
I have it set to only sync contacts that are already in my phone, but if a friend texts me who has their number on Facebook, their picture shows up instantly, no syncing required. It's downright creepy to the point of making me seriously consider turning it off. OS integration is a solved problem. It's actually browsing Facebook that doesn't work.
Thus far, Facebook hasn't even proven that they can competently develop a mobile app, let alone an operating system. Even if the issue isn't talent, but resource allocation, are we really to expect that they're motivated enough to develop a mobile OS if the mobile experience hasn't been important enough to them until now to even finish their app?
Heed the warning folks, hire specialists or your startup will be making phones before you know it!
IMO, FB is extending its vertical with a mobile-only social app AKA the "FB OS."
Apple has always been a hardware and software company with a very specific philosophy about user experience being everything. The digital music revolution gave Steve Jobs the opening to create the iPod that basically resurrected the company. That ply has been extended into phones and mobile computing.
Google is (from a revenue perspective) a search and advertising company. Their business model is predicated on how much you use the internet. So what Google is concerned with is everything between you and the internet. They've done Chrome, Android, etc to commoditize every link in that chain. Everything they do is about you using the internet easier, cheaper, in more places or more often.
Microsoft is about one thing and one thing only: selling Windows and Office licenses to enterprise and OEM customers. Nothing else matters. Look at the Kin: they bought Danger (with its once successful Sidekick) but then spent the better part of two years rewriting its OS as some Frankenstein version of Windows mobile. It arrived way too late and was dead before the first unit was sold (in large part due to the enormous data costs that Verizon saddled it with as they'd lost patience with the delay). Windows Phone 7 has the same goals.
Facebook is all about capturing and cultivating your relationships. They are a silo. They want to own that data because that data is their business and their entire value. Integration with everything else is about allowing other people to give Facebook more data.
What sense does a mobile platform make in that context? Absolutely none that I can see. How does it let them capture and control more data? Apple has had huge success with the iPhone because they have the industrial design, UI experience, supply chain management (which shouldn't be underestimated), iTunes (as much as many--including me--hate the application it is a near-monopoly in digital content) and retail channel.
For Facebook to succeed in the mobile space they would need most if not all of these things. It's a huge risk for relatively little gain and a small payoff. I can only thing that by leveraging a mobile platform of their own they could essentially lock out other platforms. The problem is that Facebook is usable with any Web browser.
I can't imagine Facebook doing any more than controlling the Facebook experience on all mobile platforms, an area they're still sadly lacking in (iPad app anyone?).
Basically this makes as much sense as Twitter making a mobile phone.
I certainly agree there are opportunities for better FB integration into mobile devices but I don't think that translates to a viable business in making mobile phones (imho).
It's a bit like developing your own OS to compete with Windows because you want a better version of Outlook.
That's a very poor analogy--selling Macs, iPods, iPhones, iPads, Windows, Office, and AdWords are profitable and lucrative business models, while owning social data is only a potential basis for a future business model. How do you turn that social data into revenue? Sell phones to your users with a persistent connection to the social graph? That's a reasonable pivot. The social graph is a value-add to the phone, not an end in itself, not until they find some other way of monetizing it.
Has there even been an entity having only "a potential basis for a future business model" that has grown so large it can out to whole other industries?
It opens the possibility for more location-based services, and therefore more location data. I can imagine a mobile "Like" button that when pressed reports your current location a la Foursquare. A location-aware mobile platform would also create some interesting tie-ins with Facebook games/apps. For example, go to Home Depot and hit the "Like" button on your phone and get more fertilizer in FarmVille,
You're right though, all of these features can be achieved on existing phones, but at a much higher price point. The article suggests that Facebook is targeting the $50 phone market to get the phones into as many hands as possible. That's a different market from the BlackBerry/Android/iPhone/Windows Phone market. It sounds like the KIN strategy.
Not what Kin turned out to be, but what Kin was originally intended to be: the phone that is to social networking what the Blackberry is to enterprise email.
As mentioned in the grandparent post, Microsoft's dragged-out WinMo refactoring of Kin cost them their original deal with Verizon, but there's no reason Facebook couldn't negotiate a similar or even better deal for cheap data plans for the Farmville crowd. What Facebook would have to do to stand a chance is to go head-to-head with prepaid MVNOs and outgun them on features and Facebook integration while staying roughly within their price range.
The problem with the Kin was that it ultimately became lost in delusions of competing with mainstream smartphones instead of concentrating on its core competencies. The Facebook phone would have to have no such illusions, competing instead with two-year-old Kyocera featurephones that kids buy for $39.95 contract-free, but delivering a much better Facebook experience for very little more.
To borrow a term I heard from Mark Suster though, it's a FNAC (feature, not a company).
Think about the supply chain, inventory management, retail distribution, OS development and so on that would need to go into this. I simply don't believe the business case for an FB phone exists. What's more, I don't believe FB believes it is either.
Some of these might be implementation issues, but I still don't think that even working perfectly it would be a killer feature for a phone.
The only reason kids now days buy Blackberrys over iPhones is because Blackberry has BBM, a chat feature they want.
In terms of market share, this could attack the same user as the Sidekick did years ago. The ultimate messaging and social device.
Apple has a phone and attempted a music SN.
FB has only a social network.
It seems like it could be a step in the right direction for FB, even if just to be able to compete with Google Me + Android integration
I can understand this from Google as it fits into their internet commoditization goal.
Apple's SN is all about selling more music, which is a core business for them. But to compare Apple and Google, Apple doesn't have a search engine.
WRT Ping, it's two biggest problems are:
1. Lack of FB integration; and
2. It's tied to an app (iTunes).
Apple wants (1). Betas had Facebook Connect. Rumour has it Facebook had "onerous" terms for the integration so it got killed. Lack of it is a huge problem. But that should tell you something: Apple needs FB because FB owns the much-vaunted social graph.
What? Apples and oranges. Apple designed the hardware, they're a hardware company. What TechCrunch?
I think a Facebook phone will be massively successful on name alone.
The same goes for airlines. If you're in the position where you're considering flying, pretty much all of your options suck anyway. By this, I mean that if I didn't fly home (a two hour flight), my next best option is to travel by train, which is comparable in price, takes 10x more of my time, and is (warning: unsourced memory of something I may have misread) actually les safe than flying. Flying is a hassle, but its typically an infrequent one, and it's a lot better than its alternatives.
Phones, however, are pretty much a dime a dozen, and the range of products is immense.
I've had a "dumb phone" for four years, and I don't really have a reason to upgrade. I can call, I can text, and if I really really need to I have web access on a browser that makes Lynx seem state of the art. This is enough for me.
For those who want a "smart phone" there are already great options:
- Blackberry is still a big name, and when I tried out my dads a few months ago, I liked it and considered buying one of my own.
- Apple is now the big name and iPhone has huge mind share (I can't speak to its market share off the top of my head) and people who like Apple like it a lot.
- Google is a trusted name, and they're marketing the hell out of Android. Their sales are pretty decent IIRC, and they're growing.
My point here is that there are already three large, established names that can compete "on name alone." The Facebook name, in a lot of circles, doesn't have a great reputation, particularly when talking about privacy.
I'm sure there are people out there who would buy a Facebook phone purely based on the name, but there are an awful lot who would do the opposite. Personally, when I saw the title "Facebook is Secretly Building a Phone," my first thought was "...and I would never buy it." That's based entirely on the Facebook name, based on my perception of the company.
...slightly miffed at the traction gotten by "you're a geek so your opinion doesn't reflect the average..."
As a simple example more people are starting to use credit unions: http://www.recordonline.com/apps/pbcs.dll/article?AID=/20100...
Change is never instant, it takes time for alternatives to develop and for people to buy in.
Not true at all. The Consumerist has had a category for each of the big banks forever. People hate those overdraft fees.
On another note, if I see or hear the phrase "Web-based operating system" one more time I swear I'm going to lose it. Fine, great, it's a browser-based desktop: that's cool. Or, there is no desktop, there's just a web browser with a poorly debugged set of device drivers underneath: that's cool too.
But a website does not an operating system make. ARGH!
 i had no idea my blog was the #3 result for that phrase on Google until just now. 
 I wrote the aforementioned blog entry four years ago when I still worked at Microsoft. I was dead wrong, at least for a lot of scenarios.
Facebook is not a hardware provider any more than google is, if google can't put the N1 out there and make it work I have a hard time to understand how a site like facebook would be able to.
They should concentrate on improving their applications on existing mobiles in stead of rolling out a mobile of their own.
My gut says Facebook wouldn't do this because they seem to have very high product and engineering standards and want to deliver high-end experiences which would require high-end devices and software.
This could be a popular gadget if done right. "Facebook Phone" is instantly understandable by any FB user, whereas it's not at all clear to them that they can fully use FB on an iPhone/BlackBerry/Android (and indeed, they can't).
They could make it tiny and cheap, which might capture customers that just want a smartphone for social stuff. It would be hard for any mobile app to consistently match the user experience, especially if FB keeps adding features.
They could even do simple third party apps, just like they do on the web site.
Zawinski's Law: Every program attempts to expand until it can read mail.
I propose a new law:
Every website calling itself a platform will attempt to incorporate the functionality of all other platforms that are popular at the time.
Having a phone for your platform is just another silly functionality that may or may not pan out in the end for any given platform.
It's an inevitable next step for any platform looking to invest in something/anything/i-have-ho-idea-what-do-do-now.
It makes for a good plan B, but who thinks that creating yet another competing platform in the mobile space is a good thing for Facebook, at this point? Right now they have a very comfortable position on iPhone, Android, and Phone 7, with the biggest risk for platform subversion coming from Google. That still leaves them two viable platforms on mobile, with virtually no conflicts of interest coming from Apple, and possibly none from Microsoft either. (Okay, Ping, but I don't think Apple's ambitions for Ping are anything beyond boosting iTunes sales.) Now not only will they introduce another platform, but they will turn their existing platforms hostile against them. It's the kind of behavior that will land Bing as the default operating system in future releases of iPhone.
Possible responses: a Facebook phone OS might push Google to do a deep Google Me integration into Android, thus forcing most Android users to at least give Google Me a try, which hurts Facebook. It might force Apple to make Mobile Me free, and then integrate deep photo sharing and commenting into iPhoto and iOS. Since a plurality of college students own Macs and iPod touches already, Apple has very powerful platform control that can cause trouble for Facebook should Facebook be perceived as a threat to iOS. I don't see either of these response scenarios being particularly profitable for Facebook.
This can get very, very nasty. As they said in Godfather, "Nobody wants all out war."
Android is by some metrics a good platform, but I do wonder whether it's going to be the revenue generating channel that they seem to hope it will be.
The next stage would have to be calling Julie in a sort of Google Voice type of way, where her location isn't even an issue. At that point you could just call a person, but until then there will still be a need to define which location to call them on.
I wrote something about this type of convergence a while back called the Water, Steam, and Ice of Communication: http://danielmiessler.com/blog/the-steam-water-and-ice-of-mo...
It seems like this might make Facebook more accessible for some group of Facebook users who aren't so computer savy. A dedicated device where you don't have to login, but you can see your families updates, interact, send messages, see pictures.
Also just did a quick check: http://whois.domaintools.com/facebookOS.com It's been registered since 2007, so it's certainly not something that's been off the radar from them.
The rest is all Arrington's speculation.
In six months: the Oracle phone. You heard it here first.
Now, though, it comes off more as a "me too" move.
Hopefully it's built on Android. Even if it looks and works nothing like Android, it's one less platform developers have to worry about when creating an app. I mean, imagine if developers had to create a separate version of their site for IE, Firefox, Safari, etc.
(Of course, my opinions are even more speculative than the original post- I'll wait until I actually see it to judge it.)
Like a Kindle just for one kind of activity - reading, it could something like an iPad with only one big app.
Seems line the history repeats itself and we're heading back to the future from an era of general web sites in a universal browser to a closed world of connected devices. ^_^