Facebook Inc (FB)’s Giant Mistake

The first sign that Facebook Inc (NASDAQ:FB) Home was crumbling appeared last week when exclusive carrier AT&T Inc. (NYSE:T) slashed the price of the HTC First to effectively free on contract, less than one month after the mid-range smartphone was launched. Sadly, the prospects for the First, the first phone with Facebook Inc (NASDAQ:FB) Home pre-installed out of the box, just got a little bit worse.

BGR is now reporting that AT&T Inc. (NYSE:T) is already planning to discontinue the First due to little to no interest over the past month, citing a “trusted source.” Unit volumes were allegedly “shockingly bad” and Ma Bell has only moved a grand total of 15,000 units over the past month, including after its price was dropped to a whole $1 on contract. Unsold inventory is said to be heading back to the mothership, at which point those dusty units will become HTC’s problem.

First sales were reportedly so bad they make HTC ChaCha sales look good. The ChaCha was a previous collaboration in 2011 with the social network that featured a QWERTY keyboard and dedicated Facebook Inc (NASDAQ:FB) button. Realizing that ChaCha was a truly horrific name just asking to be forgotten and/or mocked, AT&T rebranded the device as the Status stateside. Facebook Inc (NASDAQ:FB)’s presence on the Status was less prominent, and was mostly a relatively run-of-the-mill Android that featured Facebook Inc (NASDAQ:FB) integration in its nooks and crannies.

HTC Status. Source: AT&T.

Sources say that Ma Bell’s sales reps aren’t keen on Home or First, so they’re nudging consumers toward higher-profile devices. Unsurprisingly, that inevitably refers to Apple Inc. (NASDAQ:AAPL)‘s iPhone and Samsung’s Galaxy S4, both of which promptly greet customers as soon as they enter an AT&T retail store. HTC has paid up for some display real estate for the First, and AT&T can’t axe the device until this contract is fulfilled.

I was recently in an AT&T retail store, and my experience is in line with these sources. The iPhone 5, Galaxy S4, and HTC One were front and center, while the First’s dedicated display is on the periphery. What’s more troubling is that when wanting to play with the First to check out Home, I was prompted to input my personal Facebook Inc (NASDAQ:FB) login information in order to fully test drive Home. Unwilling to do so, I only got a small taste of Home’s interface, which hardly sold me on anything.

Still, even though First and Home have bombed, the episode shows that Facebook is experimenting with new mobile strategies. The experiment will likely prove to be a cheap failure, and lay the foundation for the social network’s next attempt. Eventually, it’ll get the execution right.

The article The First Real Facebook Phone Has Bombed originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook.

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