Facebook, Facing Investor Skepticism Over Mobile, Also Dinged By Developers

Investors aren’t the only ones skeptical that Facebook can capitalize on mobile users.

“Mobile developers believe that a mobile-first startup could disrupt Facebook,” Appcelerator and research firm IDC found aftersurveying 5,526 mobile developerslast month. “A resounding 66 percent of mobile developers state that it is ‘likely to very likely’ that a mobile-first social startup will disrupt the market for social applications on mobile devices and take market share from Facebook.”

Facebook’s shares fell 9.1 percent yesterday to $20.79, the biggest drop in almost two months, after a story in Barron’s said the Menlo Park, California-based company is overvalued and could fall below $15 a share. Facebook, led by CEO Mark Zuckerberg, went public on May 18 at $38, but the company hasn’t been able to rise above the IPO price since then amid concerns that it hasn’t figured out how to make money from mobile ads and mobile users.

The shares hit a low of $17.55 earlier this month, but rallied after Zuckerberg, speaking at a TechCrunch conference in San Francisco, acknowledged that Facebook had fumbled with mobile but that it was now a “mobile company.”

Zuckerberg said the company’s “biggest mistake” was relying almost entirely on HTML 5 to deliver a mobile experience to users through a web browser instead of creating standalone, or native, Facebook applications for the iPhone iOS and Google’s Android, the two most popular mobile operating systems.

Facebook began work on “Faceweb,” its HTML 5-based approach two years ago, spent four to six months building it, realized after another four months that it was a mistake since Faceweb couldn’t deliver the quality of experience mobile users expected and then began work on native apps for iPhone and Android users, Zuckerberg said.

“We burnt two years. It’s really painful,” Zuckerberg said Sept. 11, his first public appearance since Facebook’s IPO. “I think that probably we’ll look back on it and say that it’s one of the biggest mistakes, if not the biggest strategic mistake that we’ve made, but we’re coming out of that now.”

“If mobile developers believe that a new mobile-first entrant can disrupt Facebook, enterprises in mature markets should take heed. Developers are highlighting a cautionary note that all businesses should pay attention to: Mobile has the power to reshape entire industries, and these changes can be swift,” Appcelerator and IDC said in their report. “It is not enough to port elements of your existing business model over to mobile. Staying competitive in the era of mobility requires fundamentally re-envisioning traditional business models through a mobile-first lens.”

The survey, taken between Aug. 22 and 28, also found that developers weren’t satisfied with HTML 5, rating it low across a variety of metrics including user experience, performance, monetization, fragmentation, distribution control, timeliness of new updates, and security.

Apple Rules

The mobile developers polled were predominantly male (96 percent) and young (38.4 percent are in their 20s, 79.2 percent are under 40). A third live in the U.S. and 63 percent are either independent developers or work at companies with less than 10 employees.

They also said they prefer writing programs for Apple’s iOS devices, with 85 percent saying they were “very interested” in building apps for the iPhone and 83 percent focused on iPad apps.

The number of developers expressing interest in creating apps for Android has been declining over time, with less than 66 percent of developers now saying they were very interested in building Android tablet apps and only 76 percent in Android smartphone apps.

Why the dip for Android? Too many iterations of the OS, Appcelerator and IDC found. “Google’s inability to curtail Android’s massive fragmentation…has forced developers to focus on the iPad as the leading tablet platform, and on the iPhone first for smartphone apps.”

Mobile developers also had something to say about Research in Motion’s Blackberry platform – and that is that they are less interested than ever, with only 9 percent of mobile developers saying they were very interested in creating phone apps for the devices. That compares to the 40 percent who expressed interest in the platform in Jan. 2011 – a sign of how fast the mobile market is evolving, the researchers found.

And as for Windows 8, Microsoft’s newest OS, developers said they would take a “wait and see attitude” before deciding if the company can live up to its promise to allow developers to create apps that work on desktops, tablets and smartphones.