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Michael Arrington at TechCrunch insists that Facebook is secretly building its own phone. He says the company wants to create its own mobile operating system that "deeply" integrates Facebook profiles with a phone user's contact list. The software would be developed in-house while the phone's hardware would come from a third party.

He builds his case on one anonymous source and two recent hires at Facebook who would be well-suited to take on such a project. Unsurprisingly, the scoop generated a ton of buzz in the techsphere and invited a slew of skeptics to weigh in. Arrington's piece was followed by an aggressive denial by Facebook spokesperson Jaime Schopflin who told media outlets:

The story, which originated in Techcrunch, is not accurate. Facebook is not building a phone. Our approach has always been to make phones and apps more social... The bottom line is that whenever we work on a deep integration, people want to call it a ‘Facebook Phone’ because that’s such an attractive soundbite, but building phones is just not what we do.

Without a doubt, Arrington's story is thinly sourced and riddled with vague conjectures. However, the unusual, combative response issued by Facebook raises questions of its own. To understand why Facebook may be working on a phone product (be it hardware, software or something else), here are the best cases for the project:

  • Business Motives Make It Plausible, writes Chris Foresman at Ars Technica: "We're not convinced that Facebook's statements preclude some type of mobile device, like a smartphone, from being made. The most likely scenario is that Facebook would have HTC or some other manufacturer build the hardware to run a modified version of Android as described by SIA's source. Going that route would give Facebook the shortest time to market. Facebook's brand does have a very high visibility right now, especially with younger consumers. And with smartphones as popular as they have ever been, now would be as good a time as any for Facebook to make a move in this space... Building its own OS would give Facebook the opportunity to deeply integrate Facebook contact lists, photos, and other features, much like Apple ties MobileMe and iTunes with iOS and Google ties its various services with Android."
  • A Facebook-Branded Android Phone Seems Likely, writes Dan Nosowitz at Fast Company:

Of all the major OSes, Android is the only one that can reasonably be modified, and, surprise surprise, Facebook hired away a Google veteran who also worked on Android. Besides, there's precedence for social-networking-heavy Android phones--the Motorola Cliq was a reasonable success on T-Mobile with that exact philosophy. But calling that sort of project the "Facebook Phone" is as misleading as calling the Nexus One the

"Googlephone." The Nexus One was Google-branded and sold from Google's site, but in every other way it was a completely normal Android phone.

So, Facebook-branded, social-networking-focused Android phone? Not unlikely! Not even that bad an idea! Facebook mobile OS from scratch? Very bad idea. Very unlikely idea. The "Facebook Phone"? Not gonna happen. An Android phone with heavy Facebook integration? Could happen.

  • Facebook Is Lying to Avoid Angering Partners, writes TechCrunch owner Michael Arrington: "So why did Facebook do this? Normally they would just say 'we don’t respond to rumors and speculation' when anyone talks about leaks around future products. But this was different. Here’s the reason – they don’t want to freak out Google and Apple and everyone else. They work closely with these partners on Facebook’s existing applications. A Facebook branded phone may disrupt those discussions. Case in point. Also, this project is likely just getting started. Two of the three rock stars just joined the company (Tseng and Papakipos from Google, Hewitt has been with Facebook since 2007). It could be a year or more before the phone hits the market. And any number of things could happen to make them kill the whole project off. All we learned today was that the mobile space is so important that Facebook was willing to lie (while technically just spinning) about their plans. And they were so pissed off about the leak that they took that final shot at us as well. Nicely done Facebook."
  • Those Key Hires Are Intriguing, adds Foresman:

Certainly these two developers have the chops to create some type of mobile OS built around Facebook and a user's contact information. But another recent Facebook hire may also be a factor in such a project as well. Former senior product manager for Android, Erick Tseng left Google for Facebook in May, saying via Twitter that he planned to "innovate at the intersect [sic] of mobile and social."

A source for Silicon Alley Insider claimed that the rumored phone would "for sure" be using a customized version of Android, with Facebook's own design and integration layered on top. That might explain why Tseng—a high-level leader on the Android team—defected to Facebook just as the mobile OS is beginning to gain serious traction with consumers.

This article is from the archive of our partner The Wire.

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