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Facebook's "Buffy" is reportedly plotting to "slay" Android.  (Source: Joss Whedon)
HTC and Facebook have reportedly teamed up on a design code-named "Buffy"

Newly public Facebook, Inc. (FB) is still recovering from a tumultuous initial public offering, and the criticisms and condemnations that ensued over its underwriter Morgan Stanley's (MS) questionable handling of insider information on the IPO.  Now the internet giant has been forced to yet again address a regular rumor -- that it's making a smartphone.

I. Facebook's "Buffy" Phone is A-Go

But this time around the rumor has much more meat to it, thanks to a report in The New York Times.  The report deals how Facebook has hitched up with Taiwan's HTC Corp. (TPE:2498) to make a phone code-named "Buffy".  HTC will develop the hardware while Facebook would develop the software.

According to a Facebook employee, they were briefed that the company had snared "half a dozen" former engineers on Apple, Inc.'s (AAPL) iPhone team and an engineer from the iPad team to help with the project.  According to the source and an Apple engineer who was recruited by apparently turned down the offer, this is Facebook's third shot at a smartphone.

The company's alleged first go in 2010 was leaked by TechCrunch, but never materialized.  Likewise in 2011, "Buffy" was first reported on by AllThingsD, but the project yet again failed to show.  Now it appears "Buffy" is back with a vengeance -- or so The New York Times claims.

An engineer working at Apple recalls meeting with Mark Zuckerberg and being grilled about intimate details about smartphones, including the nature of the various chips used inside the iPhone.  While Facebook's past efforts have reportedly been modest, the new report indicates this time Facebook is getting serious, expanding its team of hardware experts to make "Buffy" a reality.

Mark Zuckerberg
Reportedly Facebook CEO Mark Zuckerberg lusts for a smartphone to call his own.
[Image Source: Gawker]

With rival social networks like Google Inc.'s (GOOG) Google+ gaining some traction, social networking giant Facebook is reportedly eyeing becoming an OS developer as a way to more tightly integrate its network to mobile devices and avoid just being another web firm.

Facebook Phone
Facebook, with the help of HTC and newly acquired Instagram is reportedly preparing a new smartphone, code-named "Buffy". [Image Source: Facebook]

A Facebook engineer with knowledge of the project explains, "Mark [Zuckerberg] is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms."

Still Facebook is reportedly keeping secretive about the project by not posting job listing in traditional online ads, and instead recruiting its network of real-world social connections.

II. Facebook Explores Hardware Options, Possibility of an Acquisition

The hardware side of the project has reportedly been the key obstacle for Facebook.  Sources say the company initially hope to simply "figure out" how to make a phone, but quickly recognized the need for design experts, hence the several project reboots.

But Facebook does have a good start on the software side.  There are builds of Facebook that reportedly can function as more or less a stand-alone operating system.  And Facebook has built-in imaging capabilities via its purchase of industry giant Instagram.  Plus there's the thousands of apps in Facebook's in-house app store, which include hit social gaming titles like Farmville.

The IPO, despite its flaws gave Facebook $16B USD to invest in new business.  Some suspect Facebook could buy Waterloo, Ontario's Research in Motion, Ltd (TSE:RIM) (makers of the BlackBerry smartphone) or HTC.  RIM is worth less than $6B USD, while HTC's valuation is reported around $11.8B USD.  Both companies have plunging value amid sales troubles.

HTC is reportedly an especially interesting idea, given that the companies have already casually collaborated on "Buffy".  Plus, according to The New York Times, HTC is "upset with Google for buying Motorola."

HTC Phone Quietly Brilliant
Facebook may consider buying veteran phonemaker HTC. [Image Source: Reuters]

An analyst for Gartner, Inc. (IT), Carolina Milanesi, says a Facebook phone would be more trouble for Google than Apple.  After all, its advertising-driven business model, combined with plans for low-cost handsets would indicate a jump into the world of handsets that retail for $100 USD or less (with contract) in the U.S. -- a market where Apple dominates.  Apple's customers occupy quite a different bracket, willing to pay hundreds of dollars for their latest toy.

She says, "When you offer an advertising-based phone, you’re targeting all the users on prepay that are budget-conscious of their communications costs."

With the success of the ad- and tie-in-subsidized, Inc. (AMZN) Kindle Fire tablet, both Google and Facebook are reportedly interested in pursuing free high end hardware devices that turn big profits by assailing users with a steady flow of advertisements.  Such an untested approach will certainly have its issues (most notably battery life from all the extra screen use), but it could lure in many budget buyers who have been wary of a smartphone switch.

Sources: The New York Times, All Things D

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Facebook iOS App
By Brandon Hill on 5/28/2012 12:07:47 PM , Rating: 5
The company needs to work on making a Facebook app that actually WORKS on iOS. For Facebook to be so popular, its Facebook app for the iPhone/iPad is the biggest piece of crap in the App Store. It's buggy as hell, crashes all the time, and Facebook doesn't seem to be interested at all in fixing it.

Seeing as how they can't even get a basic app right, I don't have any high hopes for a fully-functional smartphone operating system.

RE: Facebook iOS App
By Reclaimer77 on 5/28/2012 1:05:04 PM , Rating: 2
Why would they make an entirely new OS when they could, much cheaply and quickly, achieve the same goals with a custom Android fork like Amazon did with the Kindle Fire? Plus have the added consumer appeal of an existing and viable app marketplace.

About your iOS complaints, meah. Don't you know that every time something doesn't work right on iOS, an angel get's it's wings?? =P

RE: Facebook iOS App
By Flunk on 5/28/2012 1:23:38 PM , Rating: 2
That's funny, the Facebook app for Windows Phone 7 works great. You would think that they would care more about the #1 Phone OS.

RE: Facebook iOS App
By dagamer34 on 5/28/2012 1:30:02 PM , Rating: 4
Facebook doesnt make that app. It was contracted out by Microsoft. And that's probably why looks a good as it does. Have you seen the Android app? That app is horrible.

In fact, Facebook hasn't had a good mobile app since Joe Hewitt left. He did some rather groundbreaking stuff for iOS and he wrote it all himself. The fact that Facebook had billions at its disposal even pre-IPO tells you they don't want to make their mobile app so good, you'll never want to visit the website again.

RE: Facebook iOS App
By Samus on 5/29/2012 12:25:09 AM , Rating: 2
My wife has been using the Android Facebook app for over a year and never complain about crashes. Maybe they're just iOS? Who can blame them?

RE: Facebook iOS App
By notposting on 5/30/2012 9:13:40 AM , Rating: 2
Facebook makes the app, simply published by MS like many apps are on WP. Also, the app sucks, slow and jittery and half the time pictures won't load.

Not sure what the worry is about about having apps on every platform out there. That's a bonus in being platform independent...

RE: Facebook iOS App
By JBadlander on 5/28/2012 1:42:36 PM , Rating: 1
The FB App surely sucks the snow off Mt. Fuji on Blackberry OS, if anyone besides my employer is still using Blackberries...

Anyway, the world needs another phone like the world needs another hemorrhoid.

I'm off to get some Preparation H...

RE: Facebook iOS App
By Mitch101 on 5/28/2012 2:30:56 PM , Rating: 1

Your limiting your Windows phone if you use a Facebook app.

Use the People Hub and on your home screen you have a ME button its way better than any app. You can tie in Windows Live, Outlook, Twitter, Google mail, Facebook, Linked-In all into one interface that's much better than doing single apps.

RE: Facebook iOS App
By Mitch101 on 5/28/2012 2:43:07 PM , Rating: 2
This is a better video of the People Hub on the Windows Phone with Twitter, Facebook, and Linked-In integration but seriously you have to use it to appreciate it.

People Hub

This will help you with feeds filtering + social notifications

RE: Facebook iOS App
By Mitch101 on 5/28/2012 2:45:09 PM , Rating: 2
This one is good too its like Google groups but for facebook thats built into the Windows Phone people hub

Groups and Threads

RE: Facebook iOS App
By Florinator on 5/29/2012 3:10:19 PM , Rating: 2
I prefer the "People hub - Me" way to interact with FB as well. The UI is simpler, the app is MUCH more responsive and it works in both portrait and landscape mode as opposed to the standard FB app which only works in portrait mode. Too bad it doesn't cover all the functionality that the FB app has.

RE: Facebook iOS App
By inverse137 on 5/28/12, Rating: 0
RE: Facebook iOS App
By yomamafor1 on 5/28/2012 1:45:59 PM , Rating: 2
Because mobile space is where the next big revenue stream is. FB knows it, Zuckerberg knows it, all the financial analysts know it, and all the investors know it. Even in their IPO filings, FB specifically listed "the lack of mobile revenue stream" as their biggest concern. Of course they have every incentive to fix the mobile app, while slapping some advertisement on it.

RE: Facebook iOS App
By Trisped on 5/28/2012 3:23:13 PM , Rating: 1
Of course they have every incentive to fix the mobile app, while slapping some advertisement on it.
Did you read the article? They have at least two reasons not to fix the mobile app:
1. They are trying to launch a competing OS.
2. They are having trouble "implement monetization strategies for our mobile users".

Add in the fact that Facebook gets a lot of revenue from its own ads and apps which would not be easily implmented with a mobile Facebook app, and there are plenty of reasons Facebook does not want to fix their mobile apps.

RE: Facebook iOS App
By Anonymouse123 on 5/28/2012 2:48:26 PM , Rating: 2
They make just as much as they off regular browsing, and mobile is the future.

RE: Facebook iOS App
By Reclaimer77 on 5/28/2012 3:35:55 PM , Rating: 2
It seems to me that if this was the case, they wouldn't have released an official iOS Facebook app in the first place.

RE: Facebook iOS App
By Trisped on 5/28/12, Rating: -1
RE: Facebook iOS App
By kmmatney on 5/28/2012 8:50:17 PM , Rating: 2
Apps? Do they expect people to be happy with a phone that only has a Facebook app (plus maybe a few other essential items)? you'll undoubtedly have to sign up for a full data plan - it sounds like the Microsoft Kin all over again.

By matty123 on 5/28/2012 4:15:24 PM , Rating: 3
Can I just ask, does anyone actually want a facebook phone???

Ecpsecially if this is the case...

There are builds of Facebook that reportedly can function as more or less a stand-alone operating system

I can't see anything but a biiiiiiiiggggggggg fail for facebook and unfortunately HTC as well.

RE: Really
By Solandri on 5/28/2012 11:43:15 PM , Rating: 3
Facebook's knowledge of your circle of friends
+ your phone's knowledge of your location and phone calls
+ a smartphone's knowledge of your mobile web browsing habits

would make quite an unholy trinity of privacy invasion. I'm uncomfortable enough that FB, Sprint, and Google know what they know about me. But letting a single company know all that... no. Just no.

RE: Really
By inperfectdarkness on 5/29/2012 2:55:44 AM , Rating: 2
precisely. i'll NEVER use FB. it's a pox on everything that the bill of rights is.

By Motoman on 5/28/2012 1:13:20 PM , Rating: 3
"Mark [Zuckerberg] is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms."

Newsflash: Facebook *is* simply an app...on any platform.

This is nothing more than the fruitless thrashing of a company that just went public only for everyone in the world to realize that they have no capacity for growth left. There is no need for an additional phone on the market...if this thing ever sees the light of day it will have been nothing but a waste of money and time.

RE: Duh
By Mitch101 on 5/28/2012 2:35:02 PM , Rating: 2
Except the Windows Phone where they integrated Facebook, twitter, linked-in and several other items nearly into the interface of the phone. You can still download a facebook app but thats not as good as using the people hub on a Windows Phone.

RE: Duh
By Motoman on 5/28/2012 4:11:58 PM , Rating: 2
Still just an app, no matter how it's presented.

by next year
By cokbun on 5/28/2012 1:21:31 PM , Rating: 2
people will get off facebook and gets a life

I just see the end of facebook
By Shark Tek on 5/28/2012 2:51:30 PM , Rating: 2
Too late for the phone party.

In my opinion facebook have its days counted, they are going in the wrong direction.

Have fun with that...
By Adam M on 5/29/2012 5:41:33 PM , Rating: 2
Facebook should make a phone, if only to encourage competition and to piss off Apple. That being said, I would never buy a Facebook phone because I hate their apps and their website. Go ahead and partner with a manufacture, but don't buy HTC; I actually like some of their products.

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