Report: AT&T dropping Facebook phone after dismal sales

Facebook's experiment with branded hardware may be coming to an abrupt end, according to a report that AT&T is discontinuing sales of the HTC First handset after finding that people won't buy it – even for 99 cents.

The First is Facebook's showpiece for its Home application, the mobile application that Mark Zuckerberg said at its launch last month was aimed at attracting the next billion Facebook users by putting "mobile first." This meant plonking a Facebook front screen on the Android operating system that displays your feed to whomever happens to be looking.

The First phone launched with AT&T on April 12 for $99.99 on a two-year contract, and Facebook said other networks would be getting it, such as EE and Orange. The handset didn't spawn lines of eager consumers, however, and last week AT&T dropped the price to 99 cents – but it appears even that wasn't enough to tempt buyers.

Over the last week, the HTC First sold barely 15,000 units across the US, an anonymous source told BGR. The same source said that the phone would be dropped as soon as possible – when HTC's in-store advertising contract expires and AT&T shifts what units it can, the Facebook phone stocks will be returned.

"We do pricing promotions all the time and have made no decisions on future plans," AT&T told El Reg in an emailed statement.

Facebook Home certainly hasn't set the app world alight in the way the company would have wanted. Users expressed their displeasure with it early on, and although around a million users have downloaded the application so far, its popularity rating is dismal: it's number 16,822 in Google Play's ranking system.

Home is great for Facebook, putting the site front and center of the user experience, and while the app didn't carry advertising at launch, that was planned and it could have been very lucrative. But there wasn't a lot in the app to tempt the vast majority of Facebook users who don't check their feeds obsessively.

All this adds up to some worrisome news for the behoodied one: if Facebook can't enthuse mobile users, the company is in serious trouble. Mobile users are going to be key to ensuring growth for the social network, and it needs to gather large numbers of smartphone users to build revenue and keep the shareholders happy.

The apparent failure of Home isn't the end of the road for Facebook, of course – there are plenty of people still using its mobile application and/or checking feeds on their handsets. But the lack of popularity for the application does leave the company in a quandary, and makes an iOS port more unlikely.

Will Facebook rework Home into something more palatable, or will it concentrate development on the mobile applications people are already using to get onto the world's largest social network? Taking the latter course would be a considerable loss of face, but might be the smarter move in the long term. ®