Facebook Phone No Longer Just a Rumor (GOOG, AAPL, MMI, NOK, MSFT)

Everyone knows that  Facebook has more than 500 million users, a market value north of $50 billion, and a CEO whose life has already been documented in a feature film. Why does Facebook need a phone? For one reason, there are many more smartphones in use than there are Facebook users. A tight integration of Facebook with smartphone hardware could lead the company to its goal of being the world’s first $1 trillion company.

Smartphone maker HTC Corp. has announced two new models, the ChaCha and the Salsa, both of which include a button on the front of the phone that offers an instant connection to Facebook, where users can update status, check-in on location apps, upload photos, and do all the other stuff they do on Facebook. The Facebook button also blinks if the phone figures that the user has an opportunity to share something.

The two HTC phones run Android from Google Inc. (NASDAQ: GOOG) and are expected to ship in the second quarter of 2011. No pricing was announced. If you’re waiting for a similar announcement from Apple Inc. (NASDAQ: AAPL) regarding a Facebook button on the iPhone, you are likely to have a very long wait.

But other smartphone makers that use Android are likely to follow HTC with their own versions of the Facebook phone. In fact, Facebook’s CEO told the crowd at Mobile Congress World to expect “dozens of phones with much deeper social integration than anything we’ve seen so far.” Whether Motorola Mobility Holdings Co. (NYSE: MMI), Samsung, or LG Electronics will follow suit remains to be seen. Nokia Corp. (NYSE: NOK) could do something, but its recent deal with Microsoft Corp. (NASDAQ: MSFT) could lead the Redmond folks bury the idea.

A more interesting announcement at Mobile Congress World was the introduction of Facebook for SIM by an Amsterdam-based digital security firm called Gemalto. The application runs in the phone’s SIM card, not on the phone’s processor, and allows users to access all the text-based services on Facebook.

That’s not as feature-rich as the HTC phones, but it works on every one of the 5 billion GSM phones in the world without a special data plan from the mobile wireless carrier. It even works on phones that don’t have a browser.

Customers can now have their Facebook in a stripped down, essentially free text-based form, or in a full-blown hardware-enabled smartphone. Facebook wins, no matter what a customer chooses.

Paul Ausick