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Friday, May 10, 2013

Here's why the Facebook phone flopped

Facebook Home
The HTC First, also known as the Facebook phone.
(Credit: Josh Miller/CNET)
The HTC First, also known as the Facebook phone, was unofficially declared a disaster after AT&T dropped its price from $99 to 99 cents on Wednesday.
Is anybody surprised?
Even in an industry known for liberal smartphone discounts, the price drop of the First -- which comes less than a month after its debut -- came relatively quickly. That suggests what many of us have suspected: that the First was dead on arrival.
Despite an army of naysayers, the First actually had a lot going for it. It had the backing of a well-known name in Facebook, which actually poured money into an advertising campaign for the device. AT&T, meanwhile, had an exclusive deal to sell the device and promised to push it as a flagship device this season.
Yet AT&T is holding a "temporary sale" for the First.
A spokesman for AT&T said these sales are common, while a Facebook representative said this was a good move by the carrier. AT&T declined to comment on sales figures.
Here's my break down of what went wrong with the HTC First.
Facebook Home isn't for everyone. Part of the HTC First's failure can be traced back to the reason why it was created: the Android skin that Facebook promised would put people first.Facebook Home dominates the phone's user experience, and while there are shortcuts to get you to your favorite apps, it's a jarring change and one that some people weren't ready for. It's at best an experiment, and given the poor reception and negative reviews that it has garnered on the Google Play store, one that's not yet ready for primetime.
Now try and sell a phone that is completely dedicated to Facebook Home. Sure, you could turn it off, turning it into a decent little stock Android phone, but that would be missing the point of buying the phone.
Unremarkable hardware. While Facebook Home may have been controversial, it at least was a bold step in different direction. The HTC First lacked any of that innovation.
It was clear HTC's B team worked on this device. On one hand, you have the beautifully designed all-metal HTC One, and on the other, you had the First. It's not that it was particularly bad; it was just unexciting.
Not that I'm a fan of Facebook Home, but it probably deserved better.
At $99, it was still too expensive. I get that the conventional look and design was a result of AT&T, Facebook, and HTC wanting the phone to be as affordable as possible. So why go halfway? The phone should have been given away in exchange for a two-year contract.
A Facebook phone for free? That might turn some heads -- at least among hardcore users of the social network.

We'll see if the 99-cent mark resonates with buyers, as it definitely marks some progress.
You can get Home anywhere. What was the point of a smartphone focused on Facebook Home when you can get Facebook Home on several different -- and superior -- phones?
I get that the First was a showcase phone for Facebook's new software. But consumers don't want to buy a showcase piece; they want a real product.
In addition, you couldn't get the First unless you were an AT&T customer or willing to sign up for its service. Facebook and HTC opted to go with AT&T because of the support that a carrier with an exclusivity agreement brings, but in this case, AT&T's help didn't do much to boost sales.
But as most vendors have demonstrated, exclusivity agreements are passé, with most opting to go big with distribution. Facebook could have rolled the dice and relied on the strength of its name and offered up the phone to all of the major carriers.
Too much competition. While AT&T said First was positioned as flagship phone, in reality, there were several more appealing flagship phones on their way. The HTC One came out last month, and the Samsung Galaxy S4 is making its way to stores now. Both phones, by the way, are able to use Facebook Home.
Does this spell the end for Facebook Home? No, but it's certainly a setback and has to leave the other handset vendors wondering if working with Facebook this extensively is even worth the effort.
As for Facebook and its light foray into the hardware business, hopefully the First is its last.