Facebook Inc (FB): Mobile Announcement Faces Too Many Roadblocks

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I was talking with Nazir, a friendly AT&T Inc. (NYSE:T) customer service rep, yesterday and he told me if I put my sim card in an iPhone, I’ll automatically receive a charge for a data plan regardless of whether or not I use it. “That’s annoying. It’s my phone; I should be able to use it how I want,” I replied. Nazir couldn’t really sympathize. I imagine he doesn’t have the same #FirstWorldProblems I do.

But this is just a small part of a growing problem of closed systems, where the owner cedes control over his own property. It prevents owners from unlocking the true power of the technology in their hands, and prevents companies from innovating new solutions.

Facebook Inc (FB)

Upon reading the leaked information about Facebook Inc (NASDAQ:FB)’s “new home on Android,” I found myself frustrated by this sentence: “Facebook will initially demonstrate the capability on smartphones from HTC … but has been working to reach similar arrangements with other device makers.”

Let’s back up

Last week, Facebook released an invitation to media outlets to “Come See Our New Home on Android.” The event is scheduled for Thursday, and the rumor mill has been spinning: from a new operating system to a full-fledged Facebook phone.

The announcement is sure to be Facebook’s next step in mobile. A year ago, the company was just getting started with mobile. With more people using smartphones and tablets to access Facebook than desktops and laptops, mobile monetization is an increasingly important focus for the company.

Whichever route Facebook Inc (NASDAQ:FB) has chosen, it’s sure to face resistance. This is because we, as phone owners, actually have no control over our own property.

A new OS

Here’s a huge difference between how technology works today and how it worked just 10 years ago.

If I bought a computer, which came pre-installed with Microsoft Corporation (NASDAQ:MSFT)’s Windows OS, I could do anything I wanted with it. I could install any software I wanted, and I could even install an entirely new operating system. Microsoft Corporation (NASDAQ:MSFT) didn’t have any qualms with me installing Linux, heck they’d even let me install a hacked-up version of rival Apple Inc. (NASDAQ:AAPL)’s Mac OS if I wanted. Hewlett-Packard Company (NYSE:HPQ) or Dell Inc. (NASDAQ:DELL) wouldn’t prevent me from installing or uninstalling anything on the computer either.

The story is different with smartphones. Each entity is vying for as much control over the system as possible, leaving users with essentially nothing. Google Inc (NASDAQ:GOOG) requires phone manufacturers to sign a contract to preserve the consistency of the user experience on Android devices. The phone manufacturers then tweak Android within constraints to develop what they believe is the optimal user experience. And this is what the user gets — if he wants something else, too bad.

Facebook Inc (NASDAQ:FB) has had a lot of success with the adoption of its mobile app, but now it wants to embed its social network deeper into people’s phones. Instead of a link that pops up when users fire up the Facebook Android app and installs the new OS feature automatically, the company must go through the phone manufacturers.

HTC is the first to sign on. Smaller phone companies might agree to partner with Facebook Inc (NASDAQ:FB) as well. The big fish, like Samsung, however, will likely prove a tough catch for the company. And forget about getting Apple Inc. (NASDAQ:AAPL) to agree to anything that changes its extremely closed iOS ecosystem.

This is essentially a shot in the dark by HTC, one it’s taken before, in an effort to regain the market share it’s been steadily losing to Samsung. If it turns into another flop, it won’t really hurt HTC. Samsung, on the other hand, has built up a large following with its Galaxy line of phones. It’s unlikely to disturb its user base with a Facebook intrusion.

Google Inc (NASDAQ:GOOG), for its part, will likely welcome a new Facebook feature. As mentioned earlier, there’s essentially zero chance Apple will allow Facebook to modify iOS, so if the new Facebook Inc (NASDAQ:FB) fork proves popular, there could be an uptick in Android sales. As long as the features don’t disrupt Google’s Android requirements, it ought to prove positive for the company.

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