A $0.99 HTC First shows that people may not like a phone built around Facebook

AT&T (s t) has a special deal going on for the HTC First, a smartphone dedicated to Facebook(s fb) users. You can pick up the handset for $0.99 with a two-year contract or pay $350 for a contract-free experience. While that sounds great for consumers, I wonder what it really means for Facebook’s biggest effort to date in trying to get a foot in the door of the hardware market.

Facebook Android HomeIt’s not uncommon for handsets to see reduced prices over time. After all, new models appear, making older phones a little more obsolete. Carriers, which generally buy inventory in advance, then discount the older phones to spur higher sales and the service revenues that come along for the ride. But in terms of the HTC First, there is no successor model available.

I reached out to AT&T for some thoughts and while the carrier won’t comment on individual manufacturer handset sales, I was told that it’s a promotion, which as I noted above, isn’t uncommon. There is no indication if or when the reduced prices may end.

So this could be due to sales or not. I suspect it is, mainly because I’m ruling out the other options. For starters, the phone works on AT&T’s LTE network and falls back to speedy HSPA+ service, so there’s no reason to blame the network. As far as the phone: It’s a mid-range handset made by HTC that I’d consider fairly generic.

My colleague Om reviewed it — I haven’t had a chance to use the First yet — and as someone who vastly prefers iOS(s AAPL) to Android,(s GOOG) his impressions were better than I expected. He mostly liked the Facebook Home software, which I have used. I think it’s actually very well done and runs nicely on my Galaxy Note 2. But I think this alludes to the key problem: The market is clamoring for a Facebook phone just as much as it is for a phone built around Twitter or another social service. Meaning: It’s not.

It’s difficult enough for a high-end flagship phone to stand out from its peers, let alone a mid-range handset. Frankly, I can’t see how Facebook Home helps the HTC First differentiate itself enough; particularly when the software is already available for download on better phones and is expected to arrive on other handsets in the future. Sorry Facebook, I don’t think the market likes your attempt at a smartphone.