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Facebook Phone Essential to Its Long-term Mobile Strategy

· April 4, 2013

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As you likely already know, Facebook (NASDAQ: FB) unveiled its new mobile phone strategy today at 1pm EST.  The Verge had an excellent post previewing the launch and describing the landscape.

Facebook’s new offering is called ‘Facebook Home,’ and will be a new interface available on the Android platform, that will heavily integrate Facebook’s messaging (on the phone, it’s called ‘Chat Heads’…), social feed, and photo features.  ‘HTC First’ phones with Facebook Home will be available April 12.

Even if this initial ‘Facebook phone’ is not a hit — and many are skeptical of demand for this product — this is an important step for Facebook’s evolving mobile strategy, which is necessary for Facebook to remain a competitive player.  Regardless of the outcome of this release, the company will learn valuable lessons that make the long-term success of Facebook on the mobile platform more likely.  The rapid growth of the “mobile Internet” (smartphones and tablets), makes a company’s mobile strategy increasingly essential to its long-term prospects — and mobile presents a lot of different challenges for traditional Internet companies.

Remember Google’s first mobile offering, the Google Nexus One phone?  While that phone may have been perceived as a flop mostly due to the atypical mostly-online only sales strategy, it was also seen as a ‘successful flop’ that let Google test the Android platform, paving the way for successes with later Android phones from providers like Samsung, HTC, and Motorola.

A few months ago I wrote about Facebook’s new Graph Search offering and the landscape, where I cited an excellent Economist article on how technology companies are competing in different markets, not content with the area they currently dominate, and the piece remains ever-relevant.  Companies always face the potential of being disrupted, whether by startups or by new offerings from existing competitors, and so they have to continue to innovate in order to remain competitive in these dynamic markets.  Mobile competition may be uncharted territory in a lot of ways, but it is reminiscent of past technological ‘paradigm shifts’ that challenged incumbents, and it seems that many of today’s thriving companies have learned lessons from history, by continuing to enter new markets and offer new products — like this new release from Facebook.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.