1. A Facebook phone is defense, not offense

    Do you have Facebook fatigue yet? Facebook openly recognizes it exists and I hear more of my friends on a weekly basis bailing to other services. The popularity of “I quit Facebook” posts are uncanny. Techies love to talk about the demise of Facebook and how we are all unsatisfied

    Does this look satisfying to you? Can anyone tell what is going on the screen shot of my home feed below?

    The Facebook user experience has gone mad and looks unmanageable. Facebook plays in so many areas that it rivals Google’s OS. The graphics below compares Facebook’s services to Google’s services.

    It is clear that Facebook is not longer about social but is a “social” operating system. Taking this into consideration, it is understandable why analysts have rumored a Facebook phone is coming within a year. Facebook has most of the elements in place within their platform and team that make a mobile phone feasible, including a new hardware team

    Possible Facebook phone?

    However, moving into the mobile phone market isn’t about making money from the hardware. Most likely, a Facebook mobile phone is a defensive play to hold on to users.

    As platforms grow, services and features are added to increase its reach, serving long-tail user value propositions. When platforms start serving multiple value propositions and various use cases, the catholic, universal user value proposition is diluted, reducing the impact of the network effect. Instead, platforms become associated with segmented businesses that serve specific over global constituencies, which opens doors for niched, focused players. For example, have you heard “I don’t use Facebook for that”? It is easier to be a leader in one market over a several.  

    This process is a form of “niche disruption” (inspired by creative disruption) and creates opportunities for new entrants to niche users on large platforms with a concise single value proposition. The best example of “niche disruption” are the billion dollar businesses that where created off of Craigslist.

    Craigslist gets robbed

    Facebook knows well that it is venerable to “niche disruption”. After all, Facebook succeed by launching a niche disruption against Myspace and Friendster. A Facebook phone would serve as a means to interrupt this process. A Facebook phone would increase retention and prevent leakage to more targeted platforms like Path, Quora, and Twitter because a mobile phone disrupts the paradigm of using Facebook to “It is not a site I visit but a service I live with.” The user paradigm would move to placing Facebook with likes of Apple and Microsoft over strictly an application. 

    Without surprise, Facebook’s integration with iOS6 appears to be a test of how users would respond to holistic Facebook mobile OS, with integration in key touch points such as maps, events, messaging, sharing, and the Appstore.

    There are plenty of partners waiting on the sidelines to challenge Apple in anyway possible. It would not be very difficult to find a hardware partner itching for the opportunity to join forces with the largest social network of all time. 

Don't be selfish: