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Did the iPhone Play a Role in the Failure of Facebook Home?

By: Minyanville
Posted: 5/15/2013 4:10:00 PM
Referenced Stocks: AAPL;FB;GOOG;SSNLF;T

It has only been a month since Mark Zuckerberg introduced his company's new "Home" mobile software, but it's already looking like a failure.

Facebook ( FB ) Home, the app that turns your smartphone into a social portal, has garnered poor reviews on the Google ( GOOG ) Play store. Home has a two-star rating, with over half of the 17,000-plus reviews having one-star ratings. The app has also sold poorly; it took close to a month to reach one million downloads at the Play store, which is mediocre considering the fact that Facebook has 750 million active users.

To make matters worse, BGR is now reporting that AT&T ( T ) will soon be dropping the Android-based HTC (TPE:2498) First, the first official "Facebook Phone," which was just introduced at the start of April.

According to BGR's inside sources, sales of the HTC First have been so horrible that AT&T will discontinue the HTC First and return unsold inventory to HTC. Despite a drastic price reduction to $0.99 with a two-year contract from $99, AT&T reportedly only shifted a miserable 15,000 units of the HTC First in the US last week. Apple's ( AAPL ) iPhone and Samsung's (OTCMKTS:SSNLF) Galaxy S4 -- and even the HTC One -- far outsell the first Facebook-branded phone.

The problem for Facebook, Enders Analysis mobile analyst Benedict Evans told Businessweek , is that Home was too disruptive for customers used to the Android interface.

"One of the big complaints from users was that Home upended the traditional Android environment with its widgets and app folders," said Evans. "Those all disappeared when you installed Facebook Home."

And why did Facebook not realize the importance of widgets, docks, and app folders to Android users? TechCrunch reports that it could be because many of the company's Facebook Phone testers are normally iPhone users. Since iPhones typically do not feature widgets, for example, the Facebook Phone testers thus could not see the problems with the changes made by Home that would affect the Android experience.

Despite the less-than-enthusiastic response to the app thus far, Facebook says it is standing behind Home.

"This product is still very early and this is just a first release in a long journey," said Zuckerberg in a call with analysts on May 1, adding that the app will be updated every month.

Also, the HTC First is perhaps not quite dead in the water. After BGR's report on its imminent demise, CNET said that AT&T has yet to make a call on dropping the First.

"I am not aware of any discussion ever taking place about sending the phones back or to stop selling the First," an insider source told CNET.

HTC and Facebook have both declined to comment on whether the First will live on, but an AT&T spokesman said, "We have made no decisions about future plans."

Twitter: @sterlingwong