On Thursday, April 4th, Facebook will be making an announcement on the future of the mobile platform. In order to achieve the mobile scaleout needed for revenue growth, they will adopt an embrace and extend model. The smartphones dominated by Android and iOS will remain in tact, however the mid-space of the market curve will occupy two Facebook entries.
The first entry will be a customized phone from HTC. They are the rogue hardware maker who does not have a firm relationship with Google given the Samsung connections. So, an HTC-Android model will fill that void and allow for Facebook to experiment with the mobile space.
The second entry will be an Android-based applications or landing sites that will work on every Android phone out there. Thus, an embrace and extend model of leveraging the mobile infrastructure in place.
Where will this go? Well, once established, Facebook can then leverage Microsoft and the mobile platform to apply a similar model. The holy grail in this strategy is to steal the mobile ad revenue from Google. In about 3 -6 months, the market will see if this model will work effectively. Watch for the earnings report and call to get clues on where Facebook thinks this is headed. If executed correctly, Facebook will realize the high returns as promised when they went IPO.
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