AT&T drops price of Facebook phone from $99 to $9 in just a month in worrying sign for social media giant's success

By Daily Mail Reporter

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The first mobile device to offer pre-loaded Facebook applications has already been slashed in price dramatically by At&T.

Less than a month after the HTC First phone - commonly referred to as the 'Facebook phone' - launched, the price has been reduced from $99.99 to just 99 cents.

Following a much hyped debut, AT&T, America's second largest mobile service provider, confirmed that the price cut on the smart phone took effect on Wednesday. 

HTC First phone that launched on April 12 and has already been slashed in price by AT&T from $99.99 to 99 cents
HTC First phone that launched on April 12 and has already been slashed in price by AT&T from $99.99 to 99 cents

Flop: The HTC First phone, the showcase device for Facebook's Home software that launched on April 12, has already been slashed in price by AT&T from $99.99 to 99 cents

The company is the exclusive U.S. wireless carrier for the phone, made by Taiwan's HTC Corp and launched on April 12.

An AT&T spokeswoman said price-cutting promotions are not unusual. But operators typically wait longer than a few weeks after a launch before discounting phones.

 

Richard Windsor, an independent analyst, said in his Radio Free Mobile blog that the price cut was a worrying sign for social network Facebook and its future in mobile.

'The final verdict on Facebook Home was brutally handed down yesterday with AT&T slashing the price of the HTC First from $99 to $0.99,' he said. 

Failure? The HTC First phone is the first to offer the pre-loaded Facebook Home software though other devices can carry the software too

Failure? The HTC First phone is the first to offer the pre-loaded Facebook Home software though other devices can carry the software too

News of the severe price reduction comes after much speculation and criticism from technology critics and bloggers in anticipation of its launch.

When Mark Zuckerberg unveilved the Home software that is pre-loaded in phones like the HTC First back in April, Wired magazine described it as a 'triumph of mediocracy'.

Proud: CEO Mark Zuckerberg believes Home is the best version of Facebook yet

Proud: CEO Mark Zuckerberg believes Home is the best version of Facebook yet

Om Malik from tech news website GigaOm said: 'This application erodes any idea of privacy. If you install this, then it is very likely that Facebook is going to be able to track your every move, and every little action.'

Roger Cheng from CNet explained why he believes the HTC First has already flopped.

'Facebook Home dominates the phone's user experience,' he wrote. 'And while there are shortcuts to get you to your favorite apps, it's a jarring change and one that some people weren't ready for.'

He also cites 'unexciting' design on the part of Taiwan's HTC Corp. Though not a fan of the Home software, he admitted that it 'probably deserved better' than the First device as its 'showcase phone'.

Highlighting the fact that the Home software is available on different, 'superior' phones he remarked: 'Consumers don't want to buy a showcase piece; they want a real product.'

But some tech insiders say that the huge markdown could be a sign of its potential success. According to Tim Worstall at Forbes 'phone handset pricing can be pretty odd at times. To the airtime provider there are two revenue streams not one. And it's the cumulative value of those revenue streams that they're interested in, not just the sales value of the phone.

'So, we could posit, construct an example, where the users of this new Facebook Phone are spending so much time on Facebook on their new phones that their data charges are enormous. So much so that it makes sense for AT&T to give them away so as to be able to charge all of that lovely extra money in the future.'

 

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