The question you have to wonder is would Facebook work with HTC on a project like this? Facebook already tried a similar project that was a massive failure. However that project was not a complete integration of Facebook into a viable OS on compelling hardware. The new rumors seem to indicate that what Zuckerberg is looking for is a complete integration of Facebook into every aspect of the phone and to include enough room for items like mobile billing.

When the rumors first popped up the likely candidate was Nokia. This was due to some of Nokia’s patents and their close relationship with Microsoft (many thought the integration would be with Windows Phone 8). However as we see Nokia’s outlook falter Facebook could be looking to other partners. One we think might be of interest is Samsung. Samsung is doing well financially and their products have solid consumer backing. Samsung has also expressed an interest in developing their own software and possibly OS for their phones. The match seems to work well for both sides.

However Samsung is not the latest company to get the rumor treatment. HTC is in the spotlight and oddly enough they, like Nokia, are a big Windows Phone Partner (although not exclusive like Nokia) and are also having financial issues. News of a possible Facebook phone could give them investor interest and a shot in the arm after being snubbed by Microsoft with Windows RT. Still, we are not convinced that Facebook would court HTC for a phone considering their failure before and also the shaky financial ground that HTC is on.

Outside of picking a suitable hardware company Facebook has many other challenges. For one we are not sure that the market would shift to a Facephone when they can access all of the Facebook apps from their existing phones (including iOS, Android and Windows Phone). Why would Facebook make a significant investment into this arena knowing that it will be facing that type of competition? We feel that the new team has very little to do with developing a new OS for a full Facephone, but is more about improving the integration of the existing apps. Even looking at the people that were brought over from Apple and Palm you can see that they are oriented to improving the way that users interact with Facebook and how the Facebook app integrates with the rest of the existing phone OS.

Facebook could still take the plunge into the mobile market, but now that they are a publicly traded company they must be careful with their hits and misses. In the case of a Facephone we think that the risk might be too great even for Zuckerberg.

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