Here's What Everyone's Missing About The 'Facebook Phone'

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The reason why we all can’t stop talking about a mythical “Facebook phone” is because everyone—Facebook included—understands that there’s a big vulnerability in Facebook’s mobile strategy.

The glimmers we’ve seen of the new software Facebook will unveil Thursday suggests that the social network has figured out a way to secure its future on smartphones and tablets.

Google and Apple have deep control over smartphone apps because they design the software that runs them—Android and iOS—and the marketplaces that sell them—Google Play and the App Store.

At first, Facebook hoped to bypass the smartphone giants by building mobile Web versions of its social network. But those just didn’t work well. And crucially, they did not adequately support developers who built apps for Android and iOS.

What we’ve seen of Facebook’s promised “new home on Android” is a home screen that prompts users to log in with Facebook. And that’s what you really need to know.

What can Facebook do once you’ve logged in? It knows about the apps you’ve installed—at least the ones connected to Facebook. Perhaps it can install mobile versions of apps you use on the desktop, or reinstall apps you’ve used on another device.

And Facebook can also run ads prompting users to download new apps, or expose them to new apps in its App centre. (It would be fascinating to see Facebook’s App centre, currently a feature of Facebook’s website and mobile apps, become a standalone app.)

None of this, by the way, requires exclusive Facebook hardware. And Facebook CEO Mark Zuckerberg has repeatedly said that Facebook is not building a phone. But a sample phone, made by a partner, which clearly demonstrates how this strategy will work in practice, makes perfect sense. 

Socially informed app distribution—paid or unpaid—is a critical advantage Facebook has over Google and Apple, whose stores tend to favour the highest-ranking apps in a rich-get-richer economy that disfavors new entrants.

Facebook has also highlighted how much money it makes for mobile developers. Facebook-connected players of Diamond Dash, a game made by Wooga, are nine times more likely to spend money in the game, and Facebook users generally account for a disproportionate share of in-app spending, the social network reported in a January study.

Facebook has some measures of integration with Apple’s iOS, and the companies have a good relationship. Google and Facebook don’t get along, but because Android is a relatively flexible operating system, compared to iOS, Facebook and its software and hardware partners can tweak it.

The question is how far Facebook can push it before Google pushes back. Already, Google is hoping developers will push users to log in with their Google accounts, rather than Facebook or another alternative.

But as long as Facebook is more effective at making money for developers than Google, Google will likely have to tolerate it, lest it lose the affection of restive developers. Much of the value of a smartphone lies in its apps. And much of the value of apps—at least for now—lies in their connections to Facebook.

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