Dive Brief:

• Facebook's Building 8 hardware development lab is testing a touchscreen video chat device that could arrive as early as next spring around the company's F8 developer conference, according to a report in Bloomberg. 
• The news follows separate reports in DigiTimes and Business Insider from last week that reported the company was working on a smart speaker with a 15-inch touchscreen a la Amazon Echo Show, but Bloomberg suggests the smart speaker will be a standalone product from the touchscreen chat device, priced in the low $100 range in a bid to undercut competitors like Amazon and Google. The video chat device will come equipped with a 13- to 15-inch screen, a wide-angle camera that can potentially scan people in a room and lock onto them, and microphones and speakers, and will be bolstered by artificial intelligence (AI) capabilities, unnamed sources told Bloomberg. 
• In regards to AI, Facebook also acquired an AI startup called Ozlo that will become part of Facebook's messaging apps, Business Insider reported yesterday. The Ozlo buy might help Facebook's "M" assistant catch up with more established, intelligent competitors like Google Assistant, Amazon Alexa and Apple's Siri. Facebook is hiring Apple veterans to improve its AI as well, Bloomberg said. 

Dive Insight:

Facebook has taken cracks at selling hardware before, including through some notorious failures in the smartphone space. A touchscreen video chat device, presumably integrated with most of Facebook's other products and apps, shows how tech companies are now eyeing the next big hardware wave past mobile phones to devices with more comprehensive capabilities and built-in AI personal assistants — a trend started by Amazon with the popularity of its Echo and Alexa offerings. The smart speaker, for its part, could distinguish Facebook in an ever-more crowded arena by becoming a loss leader with an especially low price tag, though there are already cheap Echo devices for sale.

The rumored hardware push from Facebook, and the quickly growing market for Internet of Things devices, in general, points to how marketers need to start thinking more about developing strategies that integrate with technology like voice-activated assistants and smaller interactive screens. Bloomberg suggested Facebook's voice chat product would be made for the living room, which might help brands directly reach consumers where they rarely can on channels outside of TV — at home, doing day-to-day activities that aren't just browsing online. 

Facebook is also the second largest digital advertising platform in the world, with its namesake product seeing 2 billion users, not to mention the popularity of properties like its image-sharing app Instagram. Those factors, combined with the company's focus on connectedness, could lead its fresh hardware ambitions to see serious traction and spur more adoption of smart devices with consumers.