When Facebook CEO Mark Zuckerberg sat before Congress like a besuited rabbit in 100 senators’ headlights, he was famously asked by Orrin Hatch how he was able to sustain a core business that is free to use. “Senator, we run ads,” came the response that launched a thousand memes on his own platform.
To that he may soon be able to add, “We make and sell IoT hardware that runs on our own chips”.
Facebook wants to design and manufacture processors to be used in its own home/consumer devices, as well as in artificial intelligence and data centre applications.
Among a number of related job ads, the social network recently advertised for a senior manager to develop and run an “end-to-end SoC/ASIC, firmware and driver development organisation,” which suggests that the plan is just leaving the drawing board.
Other ads reveal that Facebook is looking for engineers with experience in developing ASIC designs and field programmable gate arrays (FPGAs).
Facebook vs Apple and Google
The move to design custom System on Chip and application-specific processors echoes both the recent strategies of Google, which has developed microprocessors to speed AI and search features in its data centres, and Apple, which makes a range of processors for its own devices, including application, Bluetooth, and security chips.
Recent reports have suggested that Apple is looking to further reduce its reliance on Intel by ditching the x86 architecture for its Mac computers in favour of its own silicon.
In this sense, Facebook’s strategy is part of an industry-wide move by technology providers and platforms to detach from companies such as Intel and Qualcomm, and gain greater control over product development, production, and distribution, creating a more integrated manufacturing and operating environment.
Facebook in the home
The move should also be seen in the context of Facebook’s recent shift towards developing – or purchasing – its own consumer hardware, including home hubs, connected speakers, and its Oculus virtual-reality headsets.
At the heart of all this is Andrew Bosworth, Facebook’s VP of consumer hardware, who oversees Facebook’s skunkworks/Building 8 and Oculus activities, and Jay Parikh, who heads up the infrastructure division.
In August 2017, it was reported that Facebook is working on a home video chat device, featuring a touchscreen, wide-angle lens, microphone, and speakers. A formal announcement of the device is expected shortly – presumably once the fallout from Facebook’s data-sharing and privacy problems has dissipated.
Facebook is thought to be building its own voice-enabled digital assistant to run its connected hardware, pitching the social network against Amazon’s Alexa, Apple’s Siri, Google’s Assistant, Microsoft’s Cortana, and IBM’s Watson Assistant. The assistant will probably known as ‘M’ – an evolution of the discontinued chatbot of the same name.
Facebook is also working on a standalone smart speaker – running the new assistant – to take on Amazon’s Echo, Apple’s Homepod, and Google’s Home devices. The smart speakers – codenamed Fiona and Aloha – will begin mass production in June, but will not be released until October, in the run up to the festive period. Order volumes for 2018 have been cut by around 20 percent from Facebook’s original plan.
The delay and cutting back of initial production volumes may be connected to Facebook’s desire to weather the storm of the Cambridge Analytica and other recent scandals, but may also be related to the poor sales of Apple’s Homepod device, which have seen the company reduce supply chain orders from 500,000 a month to 200,000, according to this report.
Internet of Business says
Fifty percent of the US’ 535 Congressmen are millionaires, and so when Zuckerberg sat in front of them dressed, uncharacteristically, to impress, he was in the club from the get-go. He acquitted himself well.
But remember Zuckerberg’s statement: “Senator, we run ads”.
Whether Zuckerberg might have hinted that future iterations of Facebook could include ad-free premium options (“there will always be a version that is free”) is open to interpretation, but Facebook’s core business is connecting people, gathering data about them, and selling it.
Just as Google gathers data to sell advertising, and Amazon uses its connected devices to deepen loyalty to its retail, fulfilment, and delivery empire.
In this sense, widespread discomfort about Facebook’s data-gathering in the wake of the Cambridge Analytica and Android call data scandals, its abuse by fake accounts and Russian troll farms, and the class action against it over unauthorised photo tagging, will work against the social network when it comes to own-branded IoT hardware.
Facebook and hardware have always been an uneasy fit. The Oculus headsets sit awkwardly within the business, while a device that connects people via video, smart assistant, and voice already has a name: a smartphone.
Facebook’s platform connects one billion active users (out of a claimed two billion registered users), and from each of them the company pulls in $40, in effect, according to its latest financial results. But can Facebook persuade the world that it is a global retail platform like Amazon, an information-location giant like Google, or a walled-garden lifestyle technology provider like Apple? That’s a different matter.
The challenge is that people gather at parties and in bars to chat with their friends, but they don’t buy cars, groceries, or music in communal groups.
Facebook is the world’s party platform, in every sense; but a party where the host listens to conversations and flogs the data to his friends is a tough sell when it comes to IoT hardware, because that future is all about trust and transparency.
Restoring public trust may be the reason that Facebook added its name to the recent Accord, in which over 30 technology providers committed not to aid governments in cyber attacks. The problem is it has already done so – unwittingly or not.
For the time being, Facebook is a tainted brand, but that has yet to deter its users. The subtext, though, is simple: is Facebook the right brand to extend into connected and smart-home hardware? Internet of Business says no; but if even one percent of its one billion active users disagree, that’s 10 million sales (using the US definition of a billion), and 20 million if all of its two billion members hear the marketing call.