Facebook builds Asian tech links

8 September 2014

SEOUL/SAN FRANCISCO: Facebook is building links with Asian tech manufacturers in a development that is likely to further the social media giant's reach in the region.

The news that leading smartphone brand Samsung and Oculus, the virtual-reality headset maker Facebook acquired earlier this year, have released a new headset, Samsung Gear VR, that connects wirelessly to Samsung's Galaxy Note 4 phone has heightened expectations that Facebook products may feature as default options on various devices.

Oculus is also reported to be in talks with Sony, a maker of smartphones and video gaming hardware, about how the two could work together.

"Whatever the companies do with Oculus, eventually it's a way of interacting with Facebook and connects Facebook to these hardware makers and more users," Ivan Feinseth, chief investment officer at brokerage firm Tigress Financial Partners, told Bloomberg.

"Facebook is going to want to become more integrated with hardware manufacturers as it expands in Asia," he added.

A recent filing with the US Securities and Exchange Commission showed that Facebook users were growing almost four times faster in Asia than in North America.

While the latter region registered a 7% increase in numbers to 152m for the year to June, the former had leapt 26% to reach 228m. Despite this, Bloomberg noted, North America generated three times more revenue.

The company is looking for ways to boost Asian revenues and has been building its business in China, even though its use there is banned, by helping Chinese companies tap into audiences overseas. It has also bought mobile messaging app WhatsApp, which faces no restrictions in China.

Samsung itself is due to unveil a smart eyewear offer later this month – Samsung Gear Glass – to sit alongside Gear VR, as it seeks to address a slowdown in the smartphone market.

According to Lee Min Hee, an analyst at I'M Investment & Securities, that market is rapidly becoming saturated "and there isn't much room for further innovation from the hardware side", he suggested.

"Samsung and other technology companies need to find a new source of growth," he added, "which is why Samsung keeps developing wearable devices."

Data sourced from Bloomberg; additional content by Warc staff