Microsoft on Wednesday halted development of its Kin social networking-oriented mobile devices just over two months after launching them. It's the end of the road for Kin, and Microsoft says it will now "focus exclusively" on Windows Phone 7, which is due to arrive on devices this fall.
Microsoft is integrating the KIN team with the Windows Phone 7 team and will continue working with Verizon, the exclusive Kin carrier in the U.S., to sell current inventory. Microsoft won't launch Kin in Europe this fall as planned, a Microsoft spokesperson said in an emailed statement.
The writing has been on the wall for Kin for a while now: Verizon this week slashed its pricing for Microsoft Kin devices, and earlier this month Best Buy did the same. There have been rumors of dismal sales, and earlier this week Business Insider suggested that Verizon may have sold just 500 Kin phones.
But many industry watchers didn't expect the price cuts to make any difference, since Verizon's mandatory $30 monthly data plan for Kin pushes its total cost of ownership into the same echelon as most smartphones. And since Kin devices can't run third party apps, and lack other basic features such as calendar, consumers couldn't justify the expense.
AT&T's recent introduction of tiered data pricing, which includes an option for 200 megabytes of data for $15 per month, makes the $30 per month that Verizon charges seem even more unreasonable, notes Chris De Herrera, a Los Angeles-based Microsoft Windows Mobile MVP and editor of the Pocket PC FAQ blog. "I think users that want to use data want to have a smartphone with more features," he said.
"Cutting the price of service would have helped sales, but operators don't like to do that because they like the high recurring revenue," said Allen Nogee, an analyst with In-Stat in Scottsdale, Ariz. "They'd much would rather cut the phone price, or even make it free, because over a 24-month contract they can easily get that back."
In some ways, Kin's failure to gain an audience wasn't surprising: Kin is believed to have sprung from Microsoft's top secret Pink mobile development project, which was delayed on multiple occasions and reportedly also hindered by internal politics. By the time Kin reached the market in product form, the mobile industry had hit a higher gear, one that Microsoft has yet to show it's able to match.
Kin One and Kin Two had some compelling features, and they represented a new and adventurous mobile approach for Microsoft. They were also the first mobile devices to carry Microsoft's branding.
Microsoft certainly learned some lessons from its Kin experience, and now it will try to apply these to Windows Phone 7, a release with far greater importance to company's long term future.