Just in case you needed any more evidence that 2018 would be the year of the smart speaker, social media giant Facebook (NASDAQ: FB) might launch not one but two smart speakers later this year. Rumors first emerged last summer that the social network was working on such a device, which is expected to include a display that could also be utilized for video chatting. Just last month, Cheddar reported that the device could cost as much as $499, be called Portal, and potentially be introduced at the company’s annual developer conference in May.
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Now we’re hearing news that the plan includes two devices and might be launched in July.
Two smart speakers are better than one?
DIGITIMES reported yesterday that the two products are codenamed Aloha and Fiona, and both include 15-inch touchscreens. Facebook was originally targeting a ship date of May, but could be pushing that timeline back by a couple months in order to continue working on the audio quality. Taiwanese contract manufacturer Pegatron is reportedly the only assembler. Facebook will expectedly showcase various ways for family and friends to communicate with the device, as well as other functions designed for social interactions. CEO Mark Zuckerberg has been trying to refocus Facebook and its users to engage in meaningful interactions, instead of just passively consuming content on the service.
The Aloha model appears to be the rumored Portal product and will include voice commands as well as facial recognition. Portal might include music capabilities as well in some fashion, after the company inked deals with two of the major record labels recently. It’s not clear from the report what that might look like, and Facebook certainly doesn’t have an actual music-streaming service ready yet.
Fiona sounds like more of an entry-level device, but details are scant. Both devices will be among the first products to come out of Facebook’s Building 8 hardware division. Additionally, Facebook is planning an entire portfolio of video-chatting devices for the next five years, according to the report.
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A steep uphill battle
It’s hard to imagine these products being competitive in either the smart speaker or video-chatting markets. Facebook has practically no experience with consumer hardware and including a 15-inch display seems misguided. That’s large-laptop territory and will ultimately be the biggest cost driver, since displays are almost always the single most expensive component in gadgets. That fact is likely what’s subsequently driving the expected $499 price for Portal.
There’s a good chance that the device will support Spotify for music streaming, as Spotify is the largest music-streaming service and Facebook has partnered with Spotify in the past. Those deals with record labels could be more related to user-generated content.
Facebook is going to be facing steep uphill battle, at a time when the company is mired in controversy and arguably in the midst of an existential crisis. These smart speakers could prove to be a fruitless distraction.
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Evan Niu, CFA owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has the following options: short March 2018 $200 calls on Facebook and long March 2018 $170 puts on Facebook. The Motley Fool has a disclosure policy.
