Facebook’s Phone Is Here!

Facebook’s (NASDAQ:FB) recently rumored phone has already been launched, but it’s not likely to make the same waves that Google made when it came out with a phone. And that’s because Facebook’s phone is purely software, not hardware. Let’s explain…

The expectations

For the past few months word has been going around about a mythical Facebook Phone — and no, it wasn’t in regard to the HTC Status. As it turns out, the rumors weren’t unfounded. News Thursday morning pointed to the release of what could be considered a Facebook phone, but rather than a physical, tangible phone, it’s actually a software feature.

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While some may have expected a device they could hold in their hands, particularly a smartphone, analysts and Facebook CEO Mark Zuckerberg himself said making hardware didn’t really fit with Facebook’s business model. Instead, Facebook stuck with what it already knows: software.

The reality

A while back, Facebook made some arrangements with Skype to offer a video chat feature within the browser-based Facebook messaging system. Now, Facebook has made an arrangement with Orange, which has its own IP-based calling and messaging app, to set up an Internet-based calling feature within the Facebook Messenger app for iOS and Android that allows users to call phones over Wi-Fi…

The competition

Instead of pitting itself against the likes of Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) in the smartphone arena and having to make alliances with carriers and manufacturers, Facebook has pit itself against the likes of Skype (NASDAQ:MSFT) and the unavoidable Google, or Google Voice, in the realm of VoIP.

The competition between the Facebook calling feature, Skype, and Google Voice is hard to grasp, though. There are many applications offering Internet-based calling, but Facebook, Skype and Google are probably the biggest names popping up, and the array of features each offers is quite varied. While Facebook offers a free calling feature, it’s limited to Wi-Fi, at least for now, and may have national boundaries as well. Skype offers a suite of features, including voice mail, personal phone numbers, international calling, is well established in the VoIP arena, and perhaps most importantly, can be used with 3G or 4G data plans. However, users have to pay for some of Skype’s services. Google Voice has been working on establishing itself, but does offer similar services to Skype, and even makes some of them free within the U.S. and Canada.

However the competition fares, Facebook is likely to run into less trouble in the VoIP arena than it would have in the smartphone arena. Staying in the realm of software will allow Facebook to avoid the complications and significant investments that come with developing hardware. Being able to include the new feature in an app that already has an established user-base will also ensure some degree of success for Facebook’s “phone.”

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