{"id":650950,"date":"2013-04-06T13:30:16","date_gmt":"2013-04-06T17:30:16","guid":{"rendered":"http:\/\/gigaom.com\/?p=628211"},"modified":"2013-04-06T13:30:16","modified_gmt":"2013-04-06T17:30:16","slug":"why-home-wont-move-the-needle-for-facebook","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/650950","title":{"rendered":"Why Home won\u2019t move the needle for Facebook"},"content":{"rendered":"

The big question following this week\u2019s Facebook Home announcement <\/a>is whether it is going to move the needle. And when one looks at the numbers, it’s a question of reach. At least in the near term, Facebook Home will not achieve the reach needed to move the needle.<\/p>\n

Facebook avoided several traps<\/h2>\n

Facebook clearly did many things right. First, it elected not to get into the hardware business by developing its own handset, and thus competing directly with Apple, Samsung, HTC, Motorola, LG and others. Second, it didn\u2019t try to build a new operating system, and compete with Apple\u2019s iOS, Google\u2019s Android and Microsoft\u2019s Windows Phone (which is battling BlackBerry for third spot). And if it had to pick one OS, Android was definitely the right option, both because of the design choices that open source provides and the sheer number of Android devices being activated.<\/p>\n

More importantly, as anyone watching the Facebook Home event yesterday saw, Facebook went big. Facebook Home is ambitious, well designed, stunning and immersive in the experience; Mark Zuckerberg is justifiably proud of what his company has created. But the question remains, will it move the needle?<\/p>\n

The numbers tell the story<\/h2>\n

There are 130 million smartphone users in the U.S., as of the end of January (all figures are according to ComScore’s most recent report). Currently 76 percent of U.S. smartphone users, or 98 million people, have the Facebook app installed on their phones. Android currently has 52 percent of the smartphone market, which, barring switching from iPhones or other smartphones, leaves the total available market of U.S. Android users with Facebook installed to 51 million.<\/p>\n

But, crucially, Facebook Home will only work on newer (less than a year old) Android handsets, for now the HTC One X, HTC One X+, Samsung Galaxy S III, Note II, HTC One, Samsung Galaxy S4, and HTC First. (Hey, where\u2019s my Samsung Galaxy Nexus and any number of other, newer Android handsets?)\u00a0So once we take Android users currently with the Facebook app installed (about 50 million users) and subtract from that those with older and\/or lower-end Android handsets, we’re left with some 25 million possible Home users in the U.S.<\/p>\n

But there\u2019s more. Facebook Home is not for everyone. We can assume that casual users who check Facebook\u00a0infrequently \u2013 those who have it installed on their Android handset but aren\u2019t frequent users \u2013 aren’t likely to convert to Facebook Home. According to Facebook\u2019s year-end presentation, when comparing the number of Monthly Active Users to Daily Active Users, 59 percent of Facebook’s\u00a0MAUs are DAUs, which makes sense and provides some insight into casual users who don\u2019t check in daily. Nor can we ignore non-contract (prepaid) mobile users \u2013 who account for about 25 percent of the mobile user base, and often pay for data by the KB \u2013 who will find Facebook Home “immersion” to be very costly.<\/p>\n

So using the best data available, we see that Facebook’s maximum potential reach\u00a0is seriously impaired by the realities that three-quarters of Facebook\u00a0smartphone users have iPhones, Blackberries, Windows Phone, Symbian devices or older or low-end Android handsets. Are Facebook\u00a0users with iPhones or any competing devices going to switch en masse<\/i>? Certainly not enough to move the needle.<\/p>\n

Consumer concerns will factor<\/h2>\n

For casual users, and those concerned about data consumption, the Facebook mobile app will suffice. Likewise for \u00a0those who are justifiably concerned about Facebook Home\u2019s ability to monitor every minute detail of their whereabouts, activities, habits, and so on \u2013 even when they’re using other apps.<\/p>\n

And then, there\u2019s battery life, already a big issue for smartphone users, as an endless stream of pictures pops up on their handsets.<\/p>\n

At least for the U.S. market, where revenue per user is highest, Facebook Home will simply not move the needle, and shouldn’t add up to more than 10 million \u00a0to 20 million of Facebook\u2019s current 100 million U.S. mobile users.<\/p>\n

Exclusive hardware limits reach<\/h2>\n

And what about the HTC First, the Facebook handset to be offered exclusively by AT&T on April 12, the same day Facebook Home is scheduled to become available on Google Play? The HTC First is a mid-range and very well-designed handset with a good price point, four pleasing colors, and a great screen. HTC is clearly a contender, and builds gorgeous handsets.\u00a0But why is this deal, where reach is critical, an exclusive? It simply further limits reach for Facebook.<\/p>\n

Two years ago, AT&T and HTC offered the first Facebook Phone, the HTC Status with QWERTY keyboard and a dedicated Facebook\u00a0button that took you right into FB. The phone sold in AT&T stores for half the price of the HTC First, and was pulled within a few months for lack of interest. Again, the HTC First (ironically, HTC\u2019s second Facebook handset) should sell okay, but don\u2019t expect lines around the block, or even out the door. Most AT&T smartphone customers use iPhones, which accounted for 85 percent of smartphone sales last quarter.
<\/span><\/b><\/p>\n

The bigger play, and where this can<\/i> move the needle for Facebook, in time, is to produce a lower-cost handset with Facebook Home for India and other international markets where revenue per user is very low and upside is considerable.<\/p>\n

Whitey Bluestein is an international strategic advisor and corporate development specialist focused on mobile applications, prepaid, MVNOs, payments and roaming services. He is a GigaOM Pro Analyst and Mobile Industry expert, and frequent commentator on CNBC Fast Money. Visit\u00a0<\/i>whiteybluestein.com<\/i><\/a>.<\/i><\/p>\n

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