Will Facebook Home make an impact with consumers?

By Edwin Yapp April 12, 2013

Facebook gets further into the mobile game with Home, and app that tightens integration with top smartphones
Analyst however are divided as to whether consumers will bite; privacy among the obstacles

NEWS ANALYSIS: THE speculation that Facebook was going to launch its own mobile phone came to naught last week with the social networking giant merely introducing a more tightly-integrated functionality with a selected number of Android-based smartphones via an app.

And despite the brouhaha over the much-publicized event at its Menlo Park, California headquarters, industry observers are still divided as to whether the move will significantly help Facebook gain deeper share in the mobile market, something that is crucial for it to increase its revenue.

Adam Leach, principal device analyst at Ovum, said Facebook wants to increase its engagement with its users, and in particular its users accessing the service over mobile.

“To achieve this Facebook needs a mechanism to deliver its own services to a portfolio of devices,” he said in a research note ahead of the launch on April 4.

“If this can be achieved with an Android Facebook skin or a co-branded phone, then this will be better for Facebook as it avoids upsetting its current phone and platform partners and removes the immediate need to launch its own branded devices.”

Facebook, he said, currently relies on the goodwill of its partners to carry its service. Moving forward, Leach said that if the social networking giant wants to challenge rivals Google, Microsoft and Amazon, it would need to have more control over the platform and devices it uses to deliver its experience to.

At the event last week, Facebook finally unveiled a functionality known as the Facebook Home (pic above, click to enlarge), an app that converts the home screen of selected smartphones making Facebook front and center. The app will be available on Google’s Play store come April 12.

The app however will only work on a number of newer smartphone models, such as the HTC One X, HTC One X+, Samsung Galaxy S3, Samsung Galaxy Note 2, HTC One, and the soon-to-be-introduced Samsung Galaxy S4, and a newly launched phone in the United States, the HTC First.

Users of these smartphones who download this app will find that their phones will be ‘converted’ to a Facebook-centric phone, where their main home screen will be transformed to have Facebook front and center, something which the company calls Cover Feed.

According to ABC News’ Joanna Stern, users can hold down an image to comment and see more information.

Centered on the bottom of that Cover Feed screen is a small circular icon with your profile photo. Hold down on that and you will be able to get into your apps or Facebook Messenger.

Stern also said that when you get a new message from a friend, a small little circle with his or her Facebook photo will pop up, something that’s called a Chat Head. These little icons can pop up within other apps and you can tap it to automatically start chatting with that friend, she added.

GigaOM Pro’s analyst Whitey Bluestein noted that Facebook clearly did many things right.

In his post, Bluestein noted that firstly, Facebook elected not to get into the hardware business by developing its own handset, which would have meant competing directly with Apple, Samsung, HTC, Motorola, LG and others.

“Secondly, it didn’t try to build a new operating system, and compete with Apple’s iOS, Google’s Android and Microsoft’s Windows Phone (which is battling BlackBerry for third spot).

“More importantly, as anyone watching the Facebook Home event last week saw, Facebook went big. Facebook Home is ambitious, well designed, stunning and immersive in the experience.”

But will people want it?

Notwithstanding these positive points, analysts were in two minds as to whether Facebook Home will make a direct impact on its ambition to be more mobile-centric.

Bluestein noted that for casual users, and those concerned about data consumption, the Facebook mobile app, and not Home, would suffice.

Likewise for those who are justifiably concerned about Facebook Home’s ability to monitor every minute detail of their whereabouts, activities, habits, and so on – even when they’re using other apps, he added.

“And then, there’s battery life, already a big issue for smartphone users, as an endless stream of pictures pops up on their handsets [which is a negative point].

“Nor can we ignore prepaid mobile users – who account for about 25% of the mobile user base in the United States, and often pay for data by the kilobyte – who will find Facebook Home ‘immersion’ to be very costly.”

Bluestein says this is why Facebook Home is not for everyone as it can be assumed that casual users who check Facebook infrequently – such as those who have it installed on their Android handset but aren’t frequent users – aren’t likely to convert to Facebook Home.

Will Facebook Home make an impact with consumers? Jan Dawson (pic), chief telecoms analysts at Ovum, is of the opinion that Facebook Home allows it to target a huge installed base of hundreds of millions of Android users, which will be a large chunk of Facebook’s total user base of more than a billion people.

“To users, the sell here will be making it easier to share information, photos and so on with friends,” he said in a research note. “But to Facebook, this is about becoming more deeply embedded in the operating system on mobile devices and creating a broader platform.

Dawson pointed to the fact that Facebook Home would allow the social network king to track more user behavior on devices, and present more opportunities to serve up advertising, which is its main business model.

“[But] that presents the biggest obstacle to success for this experiment: Facebook’s objectives and those of its users are once again in conflict. Users don’t want more advertising or tracking, and Facebook wants to do more of both.”

Besides these doubts, GigaOm’s Bluestein also makes another relevant point.

“According to Facebook, only 59% of Facebook’s monthly active users are daily active users. So using the best data available, we see that its maximum potential reach is seriously impaired by the realities that three-quarters of Facebook smartphone users have iPhones, Blackberries, Windows Phone, Symbian devices or older or low-end Android handsets.

“Are Facebook users with iPhones or any competing devices going to switch en masse? Certainly not enough to move the needle.”

Dawson also noted that Facebook Home is a risk for mobile operators because it puts its communication services front and center on the device and makes them easier to use and more integrated with the core experience on the device.

“This should make them easier to use than when they’re buried in an app, and should accelerate the shift from carrier services to over-the-top (OTT) services,” Dawson explained. “It should be a big boost to Facebook Messenger and the associated voice and video services.”

For an insightful look on Facebook Home, check out Walt Mossberg’s review in All Things D; if you want more details on Facebook Home, go to Marguerite Reardon's FAQ on CNET.