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If the rumors of a Facebook (FB) phone are true, investors should consider abandoning ship, says...

If the rumors of a Facebook (FB) phone are true, investors should consider abandoning ship, says Henry Blodget. The company would have to face intense and entrenched competition to establish itself in a field that could hurt its own margins in a move that smacks of defensive desperation.
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Comments (26)
  • Ron Myers
    , contributor
    Comments (256) | Send Message
     
    But the only possible way you could justify investing in FB in the first place is the possibility that their genius team led by Zuck could come up with the next big thing. Even if they signed up every computer in the world to FB as it is now they'd still be a 50x earnings stock. But the idea that "hey, these guys created FB, they know the social consumer, maybe they're working on other great stuff that might actually generate revenue" is not as far fetched.

     

    I see this is as bullish as instead of the stock being 100% terrible it is now instead 99% terrible as there is at least some chance the phone could work out.
    28 May 2012, 12:59 PM Reply Like
  • Canary Cash
    , contributor
    Comments (471) | Send Message
     
    I really really really love all the FB hate & haters right now...drive this thing lower for me and the institutions please :)
    28 May 2012, 01:03 PM Reply Like
  • Kraken
    , contributor
    Comments (559) | Send Message
     
    So a software company plans to become a hardware company. This is not a good sign.
    28 May 2012, 01:08 PM Reply Like
  • Trongod2000
    , contributor
    Comments (93) | Send Message
     
    OMG what would a phone company do if it could only sell its product to the 900 million members of FB? haha you guys crack me up. Lets see.... thats twice the whole population of the US. Every man woman and child. You really need to start thinking about what your saying. You make yourself look really stupid.
    28 May 2012, 02:59 PM Reply Like
  • DougRk
    , contributor
    Comments (1622) | Send Message
     
    Not impressed if they go forward with this. What, you'll take on both GOOG and AAPL? That's crazy. Let's be honest: FB was lucky to catch the wave of social networking. That does not a brilliant leadership team make.
    28 May 2012, 01:17 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3531) | Send Message
     
    "in a move that smacks of defensive desperation."

     

    In a move that smacks of egotistical hubris.
    28 May 2012, 01:46 PM Reply Like
  • Rash Menaria
    , contributor
    Comments (105) | Send Message
     
    “Hardware is an extraordinarily difficult, low-margin, commodity business”

     

    Seems like he has forgotten Apple’s margin. Hardware as a standalone business is not a good business but Hardware plus software combine has done wonders for the one company (Apple) which has tried it. And Facebook is not the only one trying: Google has acquired Motorola and may launch Google Phone, Microsoft and Nokia are also trying to make it work.

     

    Refer http://bit.ly/L7RZ2E for more details :)
    28 May 2012, 01:48 PM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    Another rumor to fleece the little guy. Not this time sheep don't have money anymore.
    28 May 2012, 02:02 PM Reply Like
  • Rhianni32
    , contributor
    Comments (2079) | Send Message
     
    Cellphones are where the world is going for their connectivity, not PCs. If FB is to survive long term it has to start getting on board with that and they know it. Thats why they bought instagram and rolled out their own photo service.
    28 May 2012, 02:05 PM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    Now sharks eating each other. No more little guy to prey on.
    28 May 2012, 02:20 PM Reply Like
  • winrx
    , contributor
    Comments (14) | Send Message
     
    Speaking of which, it looks like FB has officially "jumped the shark" with this news. Expect to see an epic buying of puts come Tues morning...
    28 May 2012, 02:35 PM Reply Like
  • weed
    , contributor
    Comments (48) | Send Message
     
    FB could buy RIMM.
    28 May 2012, 02:58 PM Reply Like
  • tryme4225
    , contributor
    Comments (10) | Send Message
     
    Did you here this somewhere?
    28 May 2012, 03:38 PM Reply Like
  • weed
    , contributor
    Comments (48) | Send Message
     
    No. I was just making a joke by suggesting the dumbest thing I could think of. Kind of like Time merging with AOL, or HP buying Compaq.
    28 May 2012, 03:49 PM Reply Like
  • Trongod2000
    , contributor
    Comments (93) | Send Message
     
    Just stay focused. FaceBook only has a meer 900 million members to sell phones to. Thats only about twice the total men women and children in the whole US. Get real folks. FB cuold and perhaps will slam Apple.
    28 May 2012, 03:03 PM Reply Like
  • Humble Value Miner
    , contributor
    Comments (453) | Send Message
     
    but a free Facebook user would expect a free phone. If it costs like the iPhone, I'll buy the iPhone. Why to buy second choice?
    The reality in the phone market is that Apple is gaining, the others surviving.
    FB is too expensive. But I have seen NFLX and something expensive can become more expensive (before the inevitable sink). So I am not short FB (yet)
    28 May 2012, 03:57 PM Reply Like
  • DougRk
    , contributor
    Comments (1622) | Send Message
     
    Companies expand their model when they've mastered their main market. FB cannot figure out how to extract revenue from their users currently, and now they'll magically be able to focus on hardware?

     

    This also misses the point that cell phones are carrier centric, not hardware maker centric. So cracking the market is a tall order.

     

    The argument that the FB experience on an FB phone will be more integrated is laughable. There's nothing preventing FB from coding whatever experience they want into Android using the API now or partnerships with makers. HTC would kill to offer a branded FB phone, as would ZTE or other tertiary makers fighting for recognition. In the increasingly cutthroat handset space, with iOS and Android being joined possibly by WinMo and BB10, there is so much opportunity for FB to leverage their name and services for a very nice premium while remaining strictly software.

     

    Which in fact might be what they're planning with all this. In which case I'll praise them.
    28 May 2012, 04:13 PM Reply Like
  • livshk
    , contributor
    Comments (31) | Send Message
     
    Man .. women to sell FB phones to - don't forget the cats & dogs as well ..

     

    and what makes you think just because someone has an FB account he/she wants a FB phone ?

     

    I have a FB account out of necessity - to keep in touch with my larger circle of friends. I check my account every a couple of days but do not dwell long. As a happy camper of Apple products, I will never get an FB phone, even if it's free as I don't want to carry two phones.
    Most of my friends are like me - how they use their FB accounts or some simply resist to have an FB accounts. If FB cuts of native app access on other platforms, I'll tolerate accessing from web.

     

    Sure everything is possible - FB can be as good as Apple in hardware design, platform, ecosystem, and beat Apple on supply chain. While at the same time, kill Android/google, Microsoft .. along the way. but let's just say it's no trivial matter. Speaking of margin - in the mobil market, Apple grabs 70% of revenue, Samsung about 25%, HTC 1%, the rest are not making money or losing money. Apple does not get to where it is by one or two tricks.

     

    and FB will never be able to get to billions of people in China. Even if it's not blocked, FB will not be able to compete with the giangantic home grown social networks there.
    29 May 2012, 07:51 AM Reply Like
  • Trongod2000
    , contributor
    Comments (93) | Send Message
     
    I don't have a silver ball but I do see Zynga trying to expand into China. IF they succeed even minimally they will pull traffic into FB along the way. You have got to remember that the name of the game here is advertising NOT social networking. The users do the networking. The provider does the software and hosting. Part of that hosting is hosting ADs! Ads that is where the money is for FaceBook. IF they have Chinese companies that want to advertise to Chinese and other countries... they will use FaceBook to do it. FaceBook is international, the chinese social sites, so far, are not internationally significant.
    23 Jun 2012, 11:46 PM Reply Like
  • tryme4225
    , contributor
    Comments (10) | Send Message
     
    I guess will have to face the truth and always assume there will always be Facebook haters.
    28 May 2012, 03:36 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4077) | Send Message
     
    Ohoho, AAPL eat FB. Indeed, jump as fast as you can. "FB will slam AAPL"......hahahah, ROFL.
    28 May 2012, 03:52 PM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    FB to launch rocket to the MOON!
    FB found cure for cancer!
    FB resolved EU debt problem!
    28 May 2012, 05:31 PM Reply Like
  • Kraken
    , contributor
    Comments (559) | Send Message
     
    I suppose if they did all that, then that would justify the company's current valuation.
    28 May 2012, 05:52 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4077) | Send Message
     
    Na, since its Facebook its all virtual. Everyone likes ;P
    28 May 2012, 06:13 PM Reply Like
  • ahsan haque
    , contributor
    Comments (4) | Send Message
     
    fb ta analysis for next week
    http://bit.ly/M0eDiJ
    29 May 2012, 12:24 AM Reply Like
  • WayneTatum
    , contributor
    Comments (3) | Send Message
     
    LOL. It amazes me how many people hate FB without any logical reasoning. Let us address the most important facts

     

    1) Facebook has over 900 million users, If we account for individuals with multiple accounts where still in the hundreds of millions. That is nearly a billion potential customer base and growing that the FB brand can market their phone too. Obviously, we must account for those who can actually afford the smart phone to begin with, however, I'm not sure of anyone else with a larger list to market to.

     

    2) "The Future is Mobile." No programmer can deny this, the smart phone market is growing fast, the 3rd worlds are buying them more than desktops, even Africa is seeing exponential increase and they are spending large fractions of their minute salaries to purchase data. Smart phones and mobile apps are the future period.

     

    3) Facebook is your identity on the web. It always amuses me how often the haters brag about deleting their profile, yet FB continues to grow, lol. Why not stop using technology all together? More and more websites are offering FB as the alternative login for their websites. This is your ID on the web and it isn't stopping anytime soon.

     

    4) Competition. Facebook came first period. It offered a clean user interface that was simple and engaging allowing people to interact with family and friends. At first it was reserved to those invited but it was set apart because it came first. That's it. No other company is taking it over anytime soon, they have time to figure things out.

     

    The stock may continue to decrease for a little bit but the company's long term strategy, so long as they are able to execute it with precision will ensure this stock does very well in the next 5 years. So yeah, keep hating and bringing it down so I can buy :)
    30 May 2012, 01:54 AM Reply Like
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