Speculation that Facebook is working to launch its own smartphone is at an all time high, after AllThingsD reported that it is real and that it’s codenamed Buffy. Rumors that Facebook was working on its own phone were first sparked off by Techcrunch, which revealed it last year.
Apparently, Facebook will be using a modified version of Android, just like Amazon did with the Kindle Fire, to power its smartphone. It will be tweaked haevily to integrate Facebook services in the O, and will also include a new app platform powered by HTML 5.
It is partnering with HTC to build the phone, which is expected to launch in around a year. Facebook is one of the top apps on both iOS and Android, and Facebook is betting that at least some of its loyal users will prefer to use a Facebook phone instead of an iPhone or an Android device.
If its phone efforts take off, it could mean yet another revenue stream for Facebook. It could take a 30% cut for allowing apps on its platform. However, that seems like a long shot for now.
HTC has built Android phones with added Facebook features before, like the HTC Salsa and the HTC Chacha. Both of them failed miserably, but Buffy will likely have much tighter integration with Facebook.
In any case, I doubt anyone is going to buy a new phone just to use Facebook in a better way. The existing Facebook apps, and the mobile interface are good enough for users; they definitely are for me.
This seems to be a doomed effort; Facebook may be spreading itself too thin by venturing into multiple fields where it hardly has any chance of winning.