09/20/2010 02:22 pm ET Updated May 25, 2011

Facebook Building a Socialphone -- Maybe Maybe Not

There has been much debate on the rumored socialphone -- over the past 24 hours. It looks like TechCrunch kicked off the conversation around the hypothetical socialphone.

Facebook is building a mobile phone, says a source who has knowledge of the project. Or rather, they're building the software for the phone and working with a third-party to actually build the hardware. Which is exactly what Apple and everyone else does, too.

Two high level Facebook employees -- Joe Hewitt and Matthew Papakipos -- are said to be secretly working on the project, which is unknown even to most Facebook staff.

--Michael Arrington

It did not take Facebook very long to craft a response that contradicted what Arrington reported:

The story, which originated in TechCrunch, is not accurate. Facebook is not building a phone. Our approach has always been to make phones and apps more social. Current projects include everything from a HTML5 version of the site to apps on major platforms to full Connect support with SDKs to deeper integrations with some manufacturers.

--Jaime Schopflin, Spokesperson for Facebook

Let's first understand that the claims from both Arrington and Schopflin must be approached with a degree of skepticism. Each company has its reasons for their respective statements.

I do believe that Facebook has a rare opportunity in mobile. The company operates from a position of strength -- $836 million in funding, over 500 million active users on the static web and over 150 million active users on the mobile web. The popularity of the social network is based in the fact that Facebook controls the user experience. Is it such a stretch to think that a Facebook handset would not enjoy the same success?

One of the many assets Facebook could employ on its socialphone is Places. An integration of Places and the socialphone could provide the company a laundry list possibilities -- not to mention an additional source of revenue.

A Facebook branded handset could have:
  • An automatic check-in and ping service. The service pings you a special deal at McDonald's. It does this because you are a fan of McDonald's. You get a discount code which is only available to McDonald's Facebook fans. You walk over to a McDonald's where you are auto-checked-in. This notifies your friends where you are. Your friends could join you and get the same discount because they are your friends. Then using a contactless payment system the discount is applied and your credit card is automatically charged.
This sounds like a very intrusive service but one that would be opt-in only. A service like this may never gain public acceptance but it's a service that a Facebook branded smartphone could pull off.

Unfortunately, we can spend all day fabricating rumors and speculations. Facebook may never produce a handset and simply focus its resources on building the best mobile app experience.