The smartphone business is slowly becoming a two horse race, the horses being Apple and Samsung. While Apple is the maker of the beloved iPhone, but Samsung surpassed overall sales to become the biggest maker of smartphones in the world. The much awaited Samsung’s S3 has finally been launched in Europe. The new smartphone from Samsung has a bigger screen than the iPhone but with almost all the other features that iPhone 4S had plus some advancements. It is presumed to be a bigger competition to the iPhone compared to all its predecessors , thereby putting more pressure on Apple to produce a blockbuster iPhone 5 later this year.
In the meanwhile , what has come to light is that , Facebook is poaching some of the former engineers at Apple for building a smartphone. In its third iteration of smartphone plans , Facebook has turned back to hardware. If the plans do materialize then it could mean some worry for the investors.
The move would seem to more defensive than offensive. Executives at Facebook are worried that if they don’t come out with a smartphone then they could end up being just an app on other mobile platforms. So this would be a more of ‘have to’ move rather than being a ‘want to’ one. With only two hardware making firms in mobile markets , Apple and Samsung , doing good in their business ; the scenarios for the likes of Nokia and Rim haven’t been so good . So, how much of a profit making move this could be is pretty doubtful. With Amazon entering the platform game and likelihood of Samsung doing the same exiting the Android , Facebook will have to get into that sector as well if it wants to compete with the leaders.
Also distribution is becoming very difficult. Will carriers offer shelf space to them? They will also have to build network of stores . And will they circumvent the carriers? Something at which Google failed. Also users might not want to compromise on the apps they use on iOS or Android and by the time Facebook enters the market, users will have plenty of favorites. Even if its looks for a partnership for the likes of HTC or Samsung , a lot of challenges still hold. They already have an operating system, called the social graph. Perhaps, they could partner with hardware makers and carriers to get it embedded in in every mobile platform. They could rather build great apps to float on the top of all systems. If they look to enter the hardware business, it could mean really bad sign.