Where Social Media Could Be Headed? Is the Smartphones Industry a Target? : (NASDAQ: FB), (NASDAQ: AAPL)


New York, NY -- (ReleaseWire) -- 01/15/2013 --Last week, shares of Facebook Inc. (NASDAQ: FB) surged, crossing the $30 mark for the first time in six months, after the social networking giant announced that it is holding a press event. The event, which will be held at the company’s Menlo Park campus on Tuesday, led to speculation that the company is planning to launch something huge.

Some analysts have said that Facebook is expected to launch its own search engine to compete against Google Inc. (NASDAQ: GOOG). Meanwhile, there is also speculation that the company may in fact announced its own smartphone to compete against the likes of Apple Inc.’s (NASDAQ: AAPL). There are also rumors that the company is planning to bring its Messenger iOS app to the iPad.

Even before Facebook announced the press event, there was speculation that the company is working on a smartphone. Back in May, a few days after FB’s disastrous IPO, the New York Times had reported the company hired former Apple engineers who worked on the iPhone and the iPad. The New York Times said in its report that the engineers will help the company in building its own smartphone by next year.

In an article in TechCrunch over the weekend, MG Siegler said, “multiple sources have told us that they expect some of sort of Facebook Phone to be on display on Tuesday.” Siegler also said that it is not entirely clear if this will be an actual piece of Facebook branded hardware or if the company will simply use hardware from a phone maker to show off some sort of new Facebook OS for mobile.

There is speculation that the social network could possibly use its own smartphone OS, however, going with a flavor of Android seems more likely.

If indeed Facebook is planning to launch its own smartphone, it will be more bad news for Apple. In recent months, there has been growing concerns over the increasing competition Apple is facing in the smartphone market. Earlier today, the Wall Street Journal, citing people familiar with the matter, reported that Apple cut component orders for the iPhone 5 due to weaker-than-expected demand. The WSJ report further confirms the fact that increasing competition from Android-based phones is hurting Apple. In such an environment, the launch of a FB smartphone could further hurt Apple’s positioning in the smartphone market.

While some analysts are speculating that Facebook is planning to introduce a smartphone at the press event, others say that the company could bring its Messenger iOS app to the iPad.

Alexia Tsotsis said in an article in TechCrunch on Sunday that specifically she is hearing that the Messenger for iPad, complete with all Messenger features like emotions, photsharing, read receipts, location tagging, group messaging, and the new voice-recorded messaging feature, is ready for the public eye and basically it is what exists on the iPad but in a bigger format. Tsotsis, citing a source, said that the app is “totally” ready to launch on Tuesday and if the recent event is indeed a series of mobile product announcements, it could totally fit conceptually.

Facebook had launched its Messenger as a separate app on the iPhone in August 2011. However, the company has been very slow in releasing iPad apps.

Ahead of the event, Facebook received yet another rating upgrade. Deutsche Bank analyst Ross Sandler raised FB from Hold to Buy rating in a research note earlier today. Sandler also raised his price target on FB shares from $24 to $40. The analyst cited superior prospects for revenue growth among Internet companies as the reason for upgrade.

In the research note, Sandler said that ads in users’ news feeds in the mobile version of Facebook are the game changer for the company and the ramp up is happening much faster than initial estimates.

Commenting on Tuesday’s press event, Sandler said in the research note there has been speculation that the social network could launch a new search technology that helps users navigate the site much faster on PC and mobile. The analyst said that he doesn’t think FB is trying to index the broader web yet, however, the company is trying to make navigation on-site much more seamless.

So will it be a smartphone, or a search engine, or a Messenger for iPad? All eyes are now set on Tuesday’s press event.

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