Telecom Lead America: Will Facebook Home, a mobile experiment for its CEO Mark Zuckerberg, become a major threat to telecom operators?
The new application on Android, which will go live on Google’s Play store on April 12, replaces Google’s Android app launcher, and makes Facebook the first thing users see when they use their phones.
This is Facebook’s new mobile initiative to connect better with Facebook users since the social media powerhouse does not own an operating system. But it will pose risks to telecom operators, analysts warned.
The software may be available on Apple’s mobile platform and other OS platforms as well at a later stage. But there is no proper indication from Facebook.
“For carriers, the risk is that this puts Facebook’s communication services front and centre on the device and makes them easier to use and more integrated with the core experience on the device, which should make them easier to use than when they’re buried in an app, and should accelerate the shift from carrier services to over the top (OTT) services. It should be a big boost to Facebook Messenger and the associated voice and video services,” said Jan Dawson, chief telecoms analyst at Ovum.
Ovum forecasts that social messaging cannibalization of SMS revenues will grow from $32.6 billion in 2013 to over $86 billion in 2020.
Facebook could increase its app engagement (i.e. daily usage per user of the app) six-fold if it were to become the default communication platform for telephony, messaging and email. Telephony and messaging remain the most used applications on smartphones. Facebook IM and Facebook’s recently launched VoIP feature are examples of the company’s effort in the mobile communications space.
Facebook’s penetration of smartphones is around 50 percent. Total social networking penetration of smartphones is 50 percent, giving Facebook a whopping 96 percent market share.
Facebook’s messaging features are used by 14 percent of smartphone users. Total IP messaging penetration of smartphones is 34 percent, giving Facebook a 42 percent market share (Skype and WhatsApp are the leaders).
Analysts say Facebook Home, which will take over the user’s phone home screen on an Android device and provide a Facebook-centric experience and way of interacting with the device, may not solve the problem of Facebook fatigue.
While users can easily share information, photos and so on with friends, the new initiative for Facebook is about becoming more deeply embedded in the operating system on mobile devices, and creating a broader platform.
This is the next best thing for Facebook, according to Ovum, as it will allow Facebook to track more of a user’s behavior on devices, and present more opportunities to serve up advertising, which is Facebook’s main business model.
Facebook’s objectives and users’ are once again in conflict. Users don’t want more advertising or tracking, and Facebook wants to do more of both.
“It’s much lower risk than developing a phone or an operating system of its own, and if it turns out not to be successful, there will be little risk or loss to Facebook. If it does turn out to be successful, Facebook can build on the model further and increase the value provided in the application over time. The biggest challenge will be that it can’t replicate this experience on iOS, Windows Phone or BlackBerry, the three other main platforms,” said Ovum’s Dawson.
Before the official launch, Adam Leach, principal device analyst, Ovum, said: “The company wants to increase its engagement with its users and in particular its users accessing the service over mobile. To achieve this Facebook needs a mechanism to deliver its own services to a portfolio of devices. If this can be achieved with an Android Facebook skin or a co-branded phone then this will be better for Facebook as it avoids upsetting its current phone and platform partners and removes the immediate need to launch its own branded devices.”
Android is Facebook’s most important mobile playground. Android is the largest smartphone operating system, representing nearly 60 percent of worldwide smartphone shipments in 2012. Android dominates the low-end smartphone segment in which most future growth will come from. Android is tactically important for Facebook to increase its reach on mobile and grow customer engagement with its apps.
“Two third of daily smartphone usage corresponds to pre-installed applications – applications that have been installed on the device before its purchase. Although some new smartphone model come preloaded with the Facebook app, it is also important that the Facebook application is tailored for specific popular smartphone models to guarantee a superior quality of experience,” said Analysys Mason’s Principal Analysts Ronan de Renesse and Stephen Sale.
pix source: businessinsider.com
Baburajan K
editor@telecomlead.com
