AT&T Reportedly Dropping HTC Facebook Phone

May 13, 2013 (11:05 AM EDT)

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Facebook Home Invasion
Facebook Home Invasion
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Last month, when introducing his company's Facebook Home app, CEO Mark Zuckerberg declared that mobile phones are designed around apps when they should be designed around people.

The people who buy phones evidently are not convinced. They've bought few of the HTC First phones, which were the first to ship with Facebook Home pre-installed.

Consumers have purchased only about 15,000 of the devices through last week, according to Boy Genius Report (BGR), prompting AT&T to decide to discontinue selling the phone and to return unsold inventory to HTC.

[ What will this year's Google developers' conference reveal? Read Google I/O 2013 Preview. ]

Both Facebook and HTC declined to comment. An AT&T spokesman said a response would be forthcoming, but declined to say when. In the past, AT&T has characterized price drops as regular marketing events unrelated to product performance.

A warning sign came last week when AT&T dropped the price of the HTC First to $0.99 with a two-year contract. When launched on April 12, the phone was offered for $99.

For HTC, disinterest in the HTC First arrives at a bad time. The Taiwan-based smartphone maker last month reported that its first quarter net income fell 98%, its sixth consecutive quarter of decline. Its revenue drop has been attributed to competition with other smartphone makers and component shortages that delayed the availability of the HTC One smartphone.

For Facebook, the repudiation might sting but it validates the company's decision not to manufacture its own mobile phone. When Facebook Home launched last month, Ovum chief telecom analyst Jan Dawson characterized Facebook's decision to build an app rather than a phone as a low-risk bet.

A survey of 3,269 people published last month by consumer electronics shopping site found that 82% of respondents were not interested in buying a Facebook phone.

Evidently, that disinterest extends to the Facebook Home app. Through Google Play, Facebook Home has just passed a million downloads, a respectable number for a stand-alone app but hardly what a service with over a billion users might hope for.

To make matter worse, Facebook Home is plagued by poor reviews. The app at the moment has more one-star reviews (8,866) than two-star through five-star reviews combined (7,962). Its average rating is 2.2.