In what is certainly an interesting scoop, if it proves to be accurate, The New York Times’ Nick Bilton says that Facebook is making another go at building a smartphone. This time, however, it’s not doing it on its own power and has hired on “more than half a dozen former Apple software and hardware engineers who worked on the iPhone, and one who worked on the iPad.”
Facebook has made attempts at building a smartphone before, two others, claims Bilton. The first was reported on back in 2010 by Techcrunch’s Michael Arrington. The next iteration of the phone was outed back in November of last year by All Things D’s Ina Fried and Liz Gannes.
That project, code-named “Buffy”, after Avengers helmer Joss Whedon’s vampire slayer, provided the basis for the current project.
In the interim, says the NYT report, Facebook came to the realization that it was not going to be able to gin up its own hardware with just in-house talent, and began snapping up engineers who formerly worked on other smartphones and portable electronics, like the ex-Apple folks.
One engineer who formerly worked at Apple and worked on the iPhone said he met with Mark Zuckerberg, Facebook’s chief executive, who then peppered him with questions about the inner workings of smartphones. It did not sound like idle intellectual curiosity, the engineer said; Mr. Zuckerberg asked about intricate details, including the types of chips used, he said. Another former Apple hardware engineer was recruited by a Facebook executive and was told about the company’s hardware explorations.
Facebook recently released its Facebook Camera app for iOS and has previously released other standalone apps like Facebook Messenger and its primary Facebook client. This, along with the fact that Facebook has some 900M users and its own app store, has led many to conjecture that a phone of some sort is on the way.
In its original S1 filing before its IPO, Facebook exposed its fears of being shut out of the mobile arena by competitors who could simply shoulder its apps out. Listing as a potential threat “growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results.”
The company took the explanation of the threat even further, stating that “Facebook user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.”
Clearly, Facebook now wants to control its own platform, ensuring that the pipeline to its users, both for its content and its advertising, remains clear.
Google’s acquisition of Motorola Mobility was touted by many to be about patents only, but having its own hardware manufacturer certainly put it more in charge of its own mobile destiny. This goes along with recent reports that Google would expand its Nexus line to multiple manufacturers simultaneously, including Motorola, in order to offer the best Android user experience possible.
Both Facebook and Google make their money on advertising. This business model means that not being able to rely on displaying those ads to users because of a capricious decision on behalf of Apple — or in Facebook’s case, any mobile platform that it exists on — is an enormous vulnerability.
Google itself makes far more money from advertising on the iPhone than it does on its own Android devices. That’s got to keep executives up at night when they see Apple planning a new mapping service to replace Google’s on iOS and other ways in which it is divorcing Google services.
But Facebook’s risk is even higher. Unlike Google, it has no Android product to rely on to at least account for some eyeballs on its advertising. And a recent Comscore report showed that users actually spent 7.5 hours on the mobile version of Facebook a month, surpassing the web version by an hour.
That’s why rumblings about Facebook making its own phone make a lot of sense. Whether or not they can succeed is up in the air, but at least it looks like they’re at it with some decent talent.