The Vanishing Uninformed and the Facebook Phone

Posted on Author by Ben Thompson

Dan Frommer has a suggestion as to who is going to buy the Facebook phone:

Facebook unveiled its long-awaited mobile phone platform today. It is, as assumed, a Facebook “layer” on top of Google Android. I haven’t had a chance to use it yet, or even take a detailed look at the presentation. But I can already see where it might be useful and popular.

He (rightfully) tabs uninformed buyers, the folks who buy a phone because they need one, not because they have a specific model in mind.

That’s fine as far as it goes; I’m just not sure it goes that far: it’s based on an outdated view of the US market, and ignores the rest of the world.

  • In the United States, where an iPhone 4 is free,1 customers who have the option of an iPhone choose it in overwhelming numbers (over 80% on AT&T and over 60% on Verizon). It’s increasingly clear that Android market share in the US was a direct result of iPhone carrier restrictions; those are largely gone now. Further subtract the folks who prefer Android, and the addressable market in the US isn’t as big as Frommer portrays it.

  • The HTC First is only available on AT&T – the same AT&T that is completely dominated by the iPhone. Moreover, most of the uninformed are driven by price and thus use low-cost regional carriers, not the big four.

  • I am skeptical as to how aggressively AT&T (or any other carrier) will push the Facebook Phone. True, AT&T is constantly on the lookout for something, anything to counterbalance their iPhone dependence. But a Facebook phone with Messenger front-and-center is hardly in their interest

  • Outside the United States, the HTC First is a relatively expensive2 mid-range phone. The mid-range is proving to be increasingly untenable, stuck in the middle of superphones sold at premium prices3 and cheap Android phones that run the Facebook app, not to mention the LINE app, Kakao Talk app, Whatsapp…

I already noted that the product looks great. But in mobile, product is only one of many pieces in the value chain. I’m still skeptical.

  1. With contract, but that’s the point; the US market disguises the true cost of an iPhone ↩

  2. $450 unlocked ↩

  3. And said superphones are the only ones capable of running the Facebook Home app ↩