AT&T Considers Dropping HTC Facebook Phone on Tepid Sales

AT&T Inc. (T), the second-largest U.S. wireless carrier, said it’s considering whether to stop selling an HTC Corp. (2498) phone that integrates Facebook Inc. (FB) social-networking features after cutting the price by about $100.

“We’ve made no decisions on future plans,” said Mark Siegel, a spokesman for Dallas-based AT&T. The company last month became the first U.S. wireless-service provider to sell the HTC First, a smartphone built by the Taoyuan City, Taiwan-based manufacturer that comes with Facebook’s Home social-networking software.

The prospect that AT&T may drop the device indicates lackluster demand for a phone whose price was already sliced to 99 cents from $99.99. Facebook unveiled Home in early April, underscoring the urgency of keeping mobile users more engaged. Home software has met with mixed reviews, and Facebook said last week that it has been downloaded about 1 million times.

“This is a bit of a disaster for Facebook when you look at it in context, with the ongoing backlash against Facebook Home,” said Tero Kuittinen, New York-based head of sales and marketing for Alekstra Oy, a mobile-diagnostics company.

Siegel declined to comment on sales of the HTC First. Technology blog BGR reported yesterday that AT&T would discontinue the phone, citing a person it didn’t identify.

Derick Mains, a spokesman for Menlo Park, California-based Facebook, declined to comment. Shannon Roarke, a spokeswoman for HTC at Waggener Edstrom Worldwide Ltd., declined to comment.

Shares in AT&T declined 1 percent to $37 at yesterday’s close in New York, leaving them up 9.8 percent so far this year. Facebook rose less than 1 percent to $26.82, mostly unchanged so far this year. HTC shares advanced less than 1 percent to NT$281.00 on May 13, leaving the stock down 6.5 percent this year.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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