Facebook home is a newly announced smartphone interface that has been leading many pundits to declare that this program will be, at least partially, responsible for the decline in Apple. Just what is Facebook home and is it something that should be of concern to Apple? This article will provide some information regarding the offerings of Facebook Home and how it can disjoint Apple from being the primary beneficiary from the growth of smartphones.
How Does Apple Make Money From the Smartphones:
Smartphones have been an incredibly profitable bit of business for Apple. They make money both through the sale of manufactured smartphones which are sold to phone carriers who then subsidize and cell them to users, and through collections of applications through the app store that is common in Apple’s OS operating system. Apple collects a percentage of all revenues earned through their app store and the app producer receives the remainder of the revenue. It is primarily a loss of the app store which is how Apple is threatened by the advent of Facebook Home.
What is Facebook Home?:
Facebook, in their quest to expand their own revenue base, has invented Facebook Home. Facebook Home is a program that will act as an interface between the operating system on a smartphone and the end user of that Smartphone. When an individual logs into their smartphone, it will load up Facebook Home. On Facebook Home, the features of the operating system are muted behind the Facebook Home interface. All of your Facebook contacts and friends feature prominently in Facebook Home and you will access other aspects of your cellphone using this Facebook Home. As such, when you use Facebook Home the app stores that they are recommending will be prominently placed and other app stores such as Apple’s will be something that has to be accessed using other means.
Will This Eat into Apple’s Margin?
While Facebook Home will have an impact on Apple the impact is expected to be muted to start with. Whether or not Facebook Home becomes prominent and starts to displace Apple will be dependent on any killer apps that drive users to Facebook Home over and beyond those released on Apple’s infrastructure. This will likely not be immediate or guaranteed even though Facebook has a large number of users. The reason is that, even when people want to access Facebook, they have other alternative and less intrusive methods to access it without having to go through the Facebook Home page. Since Facebook Home will push many of the other services offered by Apple and other cell phone providers into the background, this may not be to the wishes of many users and they may not use Facebook Home primarily.
Conclusion:
Facebook Home is still currently in its infancy and is still being developed. While it is not fully operational at this point and will be adding new features as time goes on, it is a perceived threat to Apple’s dominance of the Smartphone market so far. Having said that, many users may be turned off by the way that Facebook Home distracts users from other applications that they may be interested in utilizing and many users may shy away from Facebook Home as a result. The trend on Smartphones is towards open and unconstrained infrastructures, which Facebook Home does not support. As such, Facebook Home will likely not have a long-term impact on Apple.
