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Facebook Inc (FB): Truly A Mobile Company

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Right after its IPO, Facebook Inc (NASDAQ:FB)‘s founder Mark Zuckerberg, was quick to point out that he views that Facebook is a mobile company. However, at that time, Facebook Inc (NASDAQ:FB) didn’t generate meaningful amounts of revenue from mobile. Fast forward a few quarters, and Facebook is set to earn billions from mobile ads, and is now launching series of apps on Android which will not only drive user engagement, but aid substantially in generating more revenue.

Facebook Inc (FB)

Deep Integration with Android; Fancy Features of ‘Home’ Designed to Keep Users Logged On

Facebook just rolled out a series of apps which the company is terming ‘Facebook Home’ for the Android OS. Facebook Home is a software experience that is not an Operating System but a series of apps that has a lot of cool features. Home is a very new and different experience as this deep integration with Google Inc (NASDAQ:GOOG)‘s Android OS, which will allow users to make Facebook the home page on their phone, by placing it on the center-stage and without using a web browser, or an app.

Facebook Inc (NASDAQ:FB) will be the first point of contact on the mobile-devices, and it will allow users to have full sized views of Facebook, through the visually rich News Feed called the cover feed. The Home has a feature called Chat heads, which enable users to keep on communicating with friends while using other apps.

For example, if a user is using Google Inc (NASDAQ:GOOG) Maps, and their friend is sending them a message or a text, the user can interact with their friend through this chat head without leaving the Google Maps app. This line of apps will be the home of the users phone, which will keep them connected to their network of contacts on Facebook Inc (NASDAQ:FB) constantly. The emphasis is on an enhanced user connectivity system, as opposed to logging onto Facebook through an app.

Initially, Facebook will be available in only a handful of Android powered devices including HTC and the Samsung Galaxy Line. Facebook has an understanding with HTC and AT&T Inc. (NYSE:T), as these two companies will be launching the first phone with Facebook Home pre-installed. The app can also be downloaded from the Google Play Store.

Big Addressable Market

In 2012, more than 700 million smartphones were shipped up from 490 million in 2011. Of which a record 213 million smartphones were from Samsung alone giving the company roughly 30% market share, according to Strategy Analytics. Samsung controlled ~19.9% in 2011, and saw big increases in user adoption for its Android-based devices. Whereas Apple Inc. (NASDAQ:AAPL) also grew its smartphone shipments with a 46% increase and shipped roughly 136 million smartphones, holding ~19% market share last year, according to Strategy Analytics.

Sales of PCs are on a secular decline from most manufacturers including Apple Inc. (NASDAQ:AAPL). As a result, it was clearly a great move by Facebook to take steps towards building more mobile-based products, as opposed to developing desktop products only.

More widespread consumer adoption, especially on Google Inc (NASDAQ:GOOG) powered Android-based devices will likely continue. Facebook will almost certainly introduce its Home product to other Android phones. The Home series of apps by Facebook Inc (NASDAQ:FB) will be at the center of the smartphone experience for the user, and a lot of consumers will adopt this product down the road.

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