In a poll conducted around the world, 50 per cent of those questioned said they would "never" switch to a Facebook phone.
However, if they had to be persuaded to do so, improved functionality would be the top reason for switching, followed by price and then design.
Five hundred people around the world were questioned in the survey conducted by a UK-based digital marketing agency, in a bid to gauge consumer appetite for a Facebook phone, 'The Telagraph' reported.
The social networking site is reportedly working with a manufacturer to produce its own mobile phone, the paper said.
Building its own device could allow the site to collect revenue from its existing advertisers more effectively by making sure their commercial content was distributed throughout the phone's different functions.
A mobile phone manufacturer has already produced the first phones to feature a dedicated Facebook button, and is looking for a way to differentiate its products from those of a rival manufacturer, the paper said.
However, Facebook's founder and chief, Mark Zuckerberg, denied reports that Facebook was considering building its own phone, arguing it "wouldn't make much sense for us", on the company's first earning call since going public.