Facebook is on course to release a smartphone by 2013, following reports that the firm has hired engineers who worked on the acclaimed iPhone and iPad devices.
The social networking giant was first rumoured to be entering the smartphone market in 2010. Although, no devices have emerged, Facebook has continued to put an ecosystem in place.
Facebook is likely to offer a budget handset with basic functionality, a strategy Amazon has perfected with its Kindle e-reader.
Facebook has an instant messaging service to rival offerings, such as BBM and iMessage. The firm also has an app store, a newly launched Facebook Camera app, and there is talk it might make a move to acquire the Opera web browser.
A Facebook employee told the The New York Times that founder, Mark Zuckerberg is concerned that Facebook will simply remain as "an app on other mobile platforms" if he doesn't create a device.
Despite getting former iPhone and iPad engineers on board with the project, Facebook is unlikely to build a high-end handset. Instead, it will probably offer a budget device with basic functionality, a strategy Amazon has perfected with its Kindle e-reader.
However, success is not guaranteed as packaging mobile services with hardware represent a significant challenge. Even established manufacturers such as Dell and HP have struggled gain market share in the mobile market, with devices such the Dell Streak and HP TouchPad being discontinued.
Facebook is also rumoured to be working on a device in conjunction with HTC, codenamed Buffy'. The status of this project remains unconfirmed, but it may be merged with Facebook's in-house effort to build a device.
Should the in-house attempt to build a device be unsuccessful, there are also suggestions Facebook may look to acquire a device manufacturer, in a move that would echo Google's $12.5 billion purchase of Motorola Mobility.
The social network has the financial means, having made $16 billion in the what was the biggest IPO in the history of Silicon Valley. This would be enough to purchase struggling Blackberry maker RIM, which is valued at $6 billion or even HTC, which is estimated to be worth $12 billion.
