Why Facebook phone?

The news have been plentiful this week on Facebook entering smart phone business.
I think there is a clear motivation behind.

Now first, a word of warning. I do not have inside information, so writing below is speculation. On the other hand, let's just note that according to rules of game theory, players move according to their interests (and capabilities).

Therefore, the right question we can ask is "What does Facebook see that would make them enter smartphone business?"

Let's first evaluate the arguments given in the link above.

1. Facebook already has an operating system to build on

It seems the argument here is weak. "Facebook could do it because it is doable". That would not make sense to investors. Let's also remember that there is room to grow in their old model.
Social advertising is not mature.


2. It has to justify its value to Wall Street

Entering new fiercely competitive businesses outside its own domain is not usually good reason.
However, Google did that. Verticalisation. But why did Google do that? Because Apple doing that? Fine, but just copying isn't enough.

3. There's enormous room for growth

Well, there is room to grow in emerging markets in their old model.

4. Facebook can't afford to fall behind Apple and Google

Here, it is interesting to notte the rumored Zuckerberg being "worried that if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms."
What would be so bad with that? Looking at their current monetisation models...let's come to that.

5. It's in the company's DNA

Well, hardware being in their DNA? They sure can attract the talent but this is not their DNA.

So, the reason as I see it, key question is this:
What is it that Facebook is lacking today?
They have the user base, they are increasing their marketing, they are offering messaging and email.

Here comes:
Facebook does not have the capability for secure transactions.
Simple as that. Make a payment, you need access to SIM or similar element in device hardware.
In the first case, Facebook is at the mercy of the megaoperators, in the latter case the hardware vendors.
Put simple, one could say that the security token is being integrated in mobile hardware.

So, to summarise:
Are social e-commerce transactions a business with hugely attractive potential? Sure. Let me know if you argue against.
Secondly, FB is widely available as mobile app or via browser today. Isn't that enough? No it is not. They are not ready for the lucrative mobile commerce market emerging.

So there is the theory. Let's note that of course FB may not implement the phone (or acquire a maker) on their own, it maybe quite good for negotiations to have that capability.
But of course, there will be new competition ahead for FB..