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Is This the Mythical Facebook Phone?

By Evan Niu, CFA - Nov 26, 2012 at 7:01PM

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Not quite.

For some strange reason, investors seem to be rather fascinated with the whole idea of a Facebook ( FB -1.14% ) phone. Forget the fact that it would make no sense for the social networker to craft a social smartphone; investors yearn for speculation and someone has to satisfy that craving. Has Nokia ( NOK -1.39% ) stepped up to fill the void?

Not quite
It's not quite a Facebook phone, per se, but the Finnish smartphone maker has now unveiled its first device with a dedicated Facebook button: the Asha 205. That little blue button will give the new device social superpowers and is a first for Nokia. The company also unveiled the Asha 206, a new feature phone.

Asha 205. Source: Nokia.

Nokia said that the users of its Asha lineup tend to be "hyper-social" so it's trying to stuff in as many social features as it can. That includes a new "Slam" feature that uses Bluetooth for local sharing. 

What it's not
The Asha family is separate from the Lumia devices that run Microsoft ( MSFT -1.97% ) Windows Phone. They're targeted squarely at the lower segment of the market, each priced in the ballpark of $60 excluding subsidies and taxes.

Lumia devices are far more important to Nokia's success, and now comprise nearly half of the company's smartphone unit sales. For Microsoft, they're one of the three primary hardware brands that the software giant is counting on to boost its smartphone market share, along with new handsets from HTC and Samsung.

Smooth move, Facebook
Partnering with phone makers to integrate Facebook functionalities is exactly the right strategy for Facebook. Doing so will broaden its social reach, while making a first-party "Facebook phone" would only reach a handful of users and potentially burn some bridges. Mark Zuckerberg knows this.

Think of Facebook's partnership with Apple ( AAPL -1.17% ), scoring direct integration in iOS and OS X. Apple's Mac installed base is small relative to Windows, but that's a ton of iPhone users that will inevitably use Facebook more now.

Partnering with Nokia for its Asha devices is by no means a game changer, but it shows that Facebook is moving in the right direction with its mobile strategy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$306.84 (-1.14%) $-3.55
Apple Inc. Stock Quote
Apple Inc.
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Nokia Corporation Stock Quote
Nokia Corporation
$5.66 (-1.39%) $0.08
Microsoft Corporation Stock Quote
Microsoft Corporation
$323.01 (-1.97%) $-6.48

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