Today's Facebook Phone Event: Is Facebook phone worth for wait?

SAN FRANCISCO -- It was years in the making; is the Facebook phone worth the wait?

Ultimately, that's for consumers and reviewers to decide.

Rumors have swirled for years about the mystical phone, which Facebook introduced at its headquarters today. For the financial sake of Facebook, it's imperative that the new phone -- manufactured by HTC, carried by AT&T and sporting an Android operating system -- sells well. It's the linchpin in the social-networking company's pursuit of mobile ads. The $99 phone goes on sale April 12.

The phone/service features Home (facebook.com/home), downloadable software that brings the Facebook experience to several Android devices: HTC One X, HTC One X+, Samsung Galaxy S III and Samsung Galaxy Note II.

At first blush, the new phone could find a receptive audience among the under-25 crowd, which is comfortable with having their mobile devices within reach at all times. Facebook chafes at suggestions that teens and twentysomethings are leaving the social network, so a phone immersed in news updates and other Facebook features might go over well.

Facebook, the No. 2 mobile-ad publisher in the U.S. behind Google, last year accounted for 9.5% of the $4.1 billion mobile ad market. It's expected to take 13% of the $7.3 billion market this year, estimates researcher eMarketer.

A phone could "hard wire" the Facebook experience on a mobile device, increasing consumers' time on the service, analysts say. But the experience has to be more than a branded device, they say. Branded phones from Barclays and Mary Kay did not fare well.

"It can't be just about the hardware," says Phillip Redman, mobile analyst at Gartner. "It can do two things for success: Change the business model and give it away to its best users; or design it for low-cost or no-cost calls among Facebook friends."

Facebook's entry is one in a glut of recent smartphone contestants. New models from Samsung (Galaxy S4), HTC (One) and BlackBerry (the Q10 keyboard) highlight a bumper spring crop. Apple's rumored iPhone 5S or iPhone 6 lurks in the shadows.

"The handset market is very competitive," says Clark Fredricksen, vice president at eMarketer. "Samsung, Apple and Android all are gaining market share, and boast computing platforms to feed into (the) mobile market. It remains to be seen if Facebook will gain traction."

Facebook boasts 1 billion members, 30% of which are mobile-only users, according to market researcher ComScore.

It was also the No. 1 mobile app in the U.S. in February in terms of engagement, accounting for 24% of all time spent on mobile apps -- 27%, if you include Instagram.

Thursday marks Facebook‘s next big step to becoming a mobile company.

Forbes writers are currently on their way through the Bay-Area morning rain and fog to an event at its headquarters in Menlo Park, California, to see the social network’s “new home on Android.”

This could mean the near-mythical “Facebook Phone,” or a forked version of Android a la Amazon’s Kindle, or a new kind of app that hooks more deeply into a phone’s operating system, like a home screen. We’ll know more in just a few hours, and you can check here for our live blog of the event. Facebook Phone Faces An Uphill Battle In Emerging Markets Parmy Olson Parmy Olson Forbes Staff Facebook Phone Speculation Grows Amid Report Of Phone Specs Tomio Geron Tomio Geron Forbes Staff

Till then, some final musings on whether any of the following rumors are true:

• That Facebook is releasing an operating system or specialized app that acts as a “skin” on top of Android, whose first iteration as a pre-installed service will be shown on a mid-range HTC phone.
• That this app or operating system or even a forked version of Android, has permission to control key parts of the phone: from its WiFi connection to the lock screen, to its system settings.
• That Facebook’s new Graph Search will be the primary search interface over Google.
• That Facebook will also release the new interface on Google Play.

Mark Zuckerberg himself will probably make the announcement on stage, but a big question is who else will be there. As far as we know Google has never officially been part of a major product launch by Facebook, but given that this is an “Android event,” might someone from Mountain View join the Zuck on stage?

And what about a carrier partner? Facebook’s designs to become the primary conduit for communication on mobile devices probably scares the living daylights out of established telcos like AT&T and Verizon, who want to avoid being seen as dumb utilities offering little more than a data connection. So if Facebook wants to maintain diplomatic relations with the telco establishment, it might have a carrier representative or two on stage as well.

Then there’s Facebook Messenger. The real-time chat service is widely seen as an answer to the mobile messaging apps becoming wildly popular among young smartphone users. Youth, incidentally, are said to be leaving Facebook, perhaps because they see it as a place increasingly spammed by older people who have joined the network: eg. inspirational quotes superimposed on sunsets, stale memes, etc. Even Facebook said in its annual report in February 2013 that “younger users” were engaging in other products “as a substitute for Facebook.”

In the report it mentioned Instagram. But youth are really flocking to Snapchat, WhatsApp, GroupMe and Kik, real-time, messaging services that were born mobile, offer more privacy and are proactively partnering with telcos. Some are even selling games through their growing networks.

For Facebook to compete with that, it needs to show off a more appealing messaging service today. Perhaps it’ll be a revamped user interface to Facebook Messenger, or added functionality for sharing videos. Either way Facebook will want to bump up the 14% of smartphone users who use Facebook Messenger, according to researchers at Analysys Mason.

Facebook overall should show on Thursday that it is offering a more native mobile experience to help it engage further with its 1 billion+ global user base — and keep its investors happy. One of the big reasons why the company stumbled on its IPO were prevailing doubts about its mobile future. But mobile is crucial to Facebook’s ability to keep making money, and so far Facebook’s ad sales on mobile phones are looking promising. Research firm EMarketer said Wednesday that it expected Facebook to book $965 million in U.S. mobile ad revenue in 2013, more than double the $391 million it brought in the year before.

More people are now accessing Facebook on smartphones than they are on desktops. If Facebook can become the default communication platform for a smartphone, Analysys Mason says, it could increase its daily engagement with users six times over.