Distilling market noise into market sense
The VisionMobile blog is a space where VisionMobile analysts and industry insiders exchange views on the fast-changing mobile market and the trends that define the future direction of telecoms.
Back to the Future: How Facebook is challenging Google at the eyeball game
[Facebook is competing for eyeballs on Google's own turf: Android. Guest author Francisco Kattan explains why Facebook's Home strategy takes us back to the days of the 2005 home screen turf war and how Google, Yahoo and Samsung are impacted]
By now most of you have heard of Facebook Home. Some of you might have even tried it. If you have been hiding under a rock for the past month, there is a good summary here:
Facebook Home “replaces your standard Android’s homescreen with an immersive Facebook experience featuring full-screen photos, status updates, and notifications. Facebook also announced that a special version of Home will come pre-installed on the new HTC First phone on AT&T.”
Facebook Home is Facebook’s attempt at taking over the user experience and app discovery of most phones without having to build a phone itself (which would result in a meager market share at best). Although execution by Facebook has been poor (see review here), the strategy behind it is brilliant. Moreover, this move represents such a significant threat to other players in the ecosystem that it will spark a second battle for control of the home screen and app discovery.
To emphasize the importance of the home screen to ecosystem players, I borrow heavily from VisionMobile’s own report on this topic, published in 2009:
“The active idle-screen (aka home screen or phone top) is the synonym of zero-click distance. It is the most premium real-estate on the handset for service delivery and promotion.”
“The ownership of the idle screen will become as elementary as customer ownership; as ubiquitous as handset branding; and as important a monetisation tool as handset accessories.”
More than a Home Screen
But Facebook Home is not just a home screen – it is a very deep application itself, with its own contacts, its own messaging, its own photo sharing, its own video sharing, and more (see illustration above). Facebook is not just providing a launchpad or discovery portal for other apps on the phone, it is virtually replacing many of them by pushing them down, deeper into the phone, where they are harder to discover. If you have an app that competes with Facebook, this is not cool. And as Facebook introduces new services, other parts of the ecosystem should be worried.
Quoting again from the 2009 VisionMobile report:
“The home screen is the starting point for all user journeys; it is therefore natural for the home screen to provide shortcuts into functionality that is used most frequently, such as search – whether it is for contacts, voicemail summaries, free minutes remaining, where’s-my-nearest, what’s my Facebook status and many more creative search scenarios. We believe that the home screen is ideally placed to aggregate all such information from third party sources in the Internet cloud, the network and the device”
Disrupting ecosystem players, one at a time
Facebook unnerves many ecosystem players with its Home move.
Google can’t allow Facebook to take over the user experience of its Android operating system. The idea was for the user experience to be owned by Google and extended by its Android licensees, not a competitor. Many of Google’s own services are threatened by Facebook Home, especially Gmail, Talk, Hangouts, Contacts, and of course Google+. Even Google Maps would be threatened should Facebook launch its own mapping service as has been rumored (It has been widely reported that Facebook bid for Waze before its recent acquisition by Google).
Samsung can’t allow Facebook (or even Google for that matter) to commoditize its devices. Facebook Home reduces the ability of handset makers to differentiate and promote their own services. With Facebook Home, Samsung devices will look and behave a lot like HTC devices.
Messaging service providers like Whatsapp, Google (Gmail), Yahoo (Mail) or the new and cool Just Me can’t allow Facebook to become the default messaging service on consumers’ phones. If you are on Facebook Home, it is much easier to send a Facebook message than dig deeper to find other messaging apps or even the phone’s native SMS client.
Yahoo has bigger problems, but if Marissa Mayer has any hope of fixing the company, it will need to figure out how to have a prominent mobile presence. This is not possible if consumers choose Facebook Home. With Facebook Home, Yahoo’s Mail, Messenger, Flickr, and even Yahoo’s cool new Tumblr service would be pushed down and become a second-class citizens on the phone.
AT&T, Verizon, Telefonica, Vodafone, and mobile operators in general who are still fighting to become relevant in the ecosystem lose even more control of service discovery. Operators today still exert some influence over some handset makers, especially in postpaid markets where they control handset distribution, subsidies and marketing spend. But as control for the user experience moves from handset makers to over –the-top providers like Facebook, the carrier’s influence over the ecosystem is crushed even more.
Back to the Future – The first battle for the home screen
Once upon a time in the not-too-distant past (early 2000s) device makers differentiated primarily on the basis of hardware. What’s the form factor? Clam shell or candy bar? Is there a full Qwerty keyboard? Bluetooth? 2G or 3G? How long is the battery life? But as the hardware became commoditized, device makers turned to differentiation on the basis of the software, and in particular the home screen and overall user interface of the phone.
When I was at Adobe I saw this play out first hand. Device makers were turning to Adobe Flash as the platform for customizing their user interfaces and deliver more engaging home screens. A couple of good examples are the LG Chocolate and the Samsung D900. They both had beautiful home screens, powered by Adobe Flash. The LG Prada took this concept quite a bit further when it launched with a big splash in 2006. A beautiful, fashionable device with cool looking apps running on the home screen, powered by Flash. It was the first phone with a capacitive touch screen. Take a look and you’ll see a resemblance to some of today’s smartphone interfaces. Keep in mind this was before the iPhone.
The operators want their piece of the action. Given the influence large carriers enjoyed over device makers at the time, there was an opportunity for them to take over the home screen to expose their own services. To enable such operators Adobe launched Flash Home in 2008 (launched by my team at the time, coincidentally). See the news here.
“Adobe Flash Home, an over-the-air, customizable UI, enabling consumers to personalize the look and feel of their handsets and discover new content and services via home screens and data-enabled wallpapers”
It sounds a lot like Facebook Home – except that rather than surfacing Facebook services to the home screen, it was about surfacing the operator’s walled gardened services.
Too little too late. Unfortunately for operators, before their efforts to take over the home screen had a chance to succeed, iOS and Android devices began to sell in large volumes, upsetting the whole ecosystem and limiting operator influence even more. Operators diverted their focus to acquiring more data users with smartphones rather than promoting their own data services on feature phones.
How should the ecosystem players react to Facebook Home?
Google. Google could launch its own “Google Home” of course, but a more wise strategy for Google is to block third party app developers from messing with the home screen. This could be done by closing the relevant APIs or more easily by changing the terms of its agreement with developers. Google’s strategy is of course to generate advertising revenues from its services, and this requires Google to “crush down anything that stands between consumer eyeballs and Google inventory” (quoted from a good VisionMobile post on Google strategy: “Flatten, Expand, and Mine”). If any app can bury all Google services behind a proprietary app launcher like Facebook Home can, that app could limit Google’s mobile ad revenues significantly. The way things stand, if Facebook Home were to gain user traction, it is not hard to see that advertising dollars would shift from Google to Facebook. This is not a desirable outcome for Google, and one that, if not blocked by Google, would ignite a battle for control of the Android home screen.
Yahoo. For as long as Google is allowing apps to take over the home screen, Yahoo should copy Facebook’s strategy and develop “Yahoo! Home” to surface all its services to the top of the phone. Flickr pictures, Tumblr posts, Yahoo messaging, Yahoo News, Yahoo Weather, and all other Yahoo services would be discovered much more easily, boosting Yahoo’s advertising revenues. To improve the likelihood that consumers will actually turn on Yahoo Home, Yahoo should learn from Facebook’s execution mistakes and do a better job of integrating with the rest of the operating system and apps. Facebook messed up with this integration and buried even critical OS functions like notifications, battery life, and even the time of day behind Facebook pictures. Yahoo (or anyone else attempting a home screen app) should also do a better job surfacing the user’s favorite apps. In other words, the home screen should expose not only Yahoo’s own apps, but also other favorite apps selected by the user to ensure a higher level of adoption.
Samsung. Samsung should fork Android and launch its own Android version in much the same way Amazon did with Kindle. Samsung is now powerful enough to maintain its own platform, using its own Galaxy brand, its own home screen, an off-the-shelf store (Amazon or Yandex store) and a white label maps solution (like Nokia Maps) – in other words, all the ingredients needed to circumvent Google’s control points. In fact, even without the threat from Facebook Home, Samsung is already investing in a vertical, Apple-like strategy strategy with the Tizen platform. Whether Tizen succeeds or not, Samsung has all the ingredients to fork Android and tighten its control over the operating system.
What are your thoughts? Do you think Facebook Home will spark a new battle for the home screen? Do you think Google should block such apps from taking over Android? What should Samsung, Yahoo, and the other big boys do?
- Francisco (@FranciscoKattan)