5 Lessons Microsoft Learned From Kin

Microsoft this week acknowledged that its Kin mobile devices were dead on arrival and halted further development. Kin ended up being an expensive experiment for Microsoft, but although the devices failed in the marketplace they did yield some important experience.

Kin wasn't a total loss -- features like Kin Studio, which replicates all content users create with the devices in the cloud and presents it in a niftily styled Webpage -- represent the kind of differentiated thinking that could help Microsoft as it prepares to unveil Windows Phone 7 this fall.

Microsoft spent $500 million to acquire Danger in 2008, but now it has two discontinued mobile devices and a bunch of hard-learned lessons. CRN looks at five that could help Microsoft as it puts the finishing touches on its mobile makeover.

1. OS Ambiguity Doesn't Work

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Kin phones carried the Windows Phone brand, a reflection of Microsoft getting more involved in the hardware design of mobile devices. But the clunkily named Windows Phone OS for Kin was a separate entity from Windows Phone 7, sharing only "some common foundational element OS components, software and services," according to Microsoft.

What was Microsoft's thinking here? Perhaps it wanted to get the Windows Phone brand out in front of consumers, and establish it to some degree, in advance of the Windows Phone 7 launch. If Kin was successful, Microsoft could label it the first Windows Phone success. If not, well, no one would notice anyway.

The first question consumers asked about Kin was whether it would be compatible with Windows Phone 7. Microsoft said it would eventually merge the two, but people probably found it difficult to get excited about an OS that looked likely to exist in a vacuum going forward, without third party mobile apps support.

2. Teens Are, Like, Tough To Market To

Microsoft obviously did its homework in researching the teen and twenty-something segment's mobile device preferences. Kin ads are splashed all over the Web, and in many large cities, and there has clearly been significant marketing spend around trying to connect with this audience. But Microsoft's efforts to court this crowd often looked overwrought and overly earnest, like the kid who tries to be too cool on his first day of school, but ends up getting a wedgie anyway.

Things might have been different if Microsoft had played the Justin Bieber card. Bieber appeared at one of Microsoft's retail store openings last year and would have been the perfect choice to show potential Kin customers that it’s OK to carry a Microsoft designed phone. One public appearance with Bieber using a Kin device and Verizon stores nationwide would have been mobbed like Apple stores on product launch day.

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3. Verizon Needs To Feed The Data Beast

Many industry watchers believe Verizon's mandatory $30 monthly data plan doomed Kin from the start, mainly because it pushes the TCO for into a similar range as current smartphones. Why would anyone want to pay that much for a device that doesn't support third party apps and even lacks a calendar?

Verizon and Microsoft argued that the $30 was justified because Kin devices have high resolution still and video cameras and store this data in the cloud. "Once [customers] realize the value of this, they'll realize it's a great deal," Greg Sullivan, senior product manager in Microsoft's mobile communications unit, told Computerworld in May.

As it turned out, consumers didn't agree. Microsoft should have driven a harder bargain with Verizon or devoted more effort to explaining why the $30 made sense.

4. Mobile Development Delays Are Fatal

Kin One and Kin Two are believed to have sprung from Microsoft's top secret "Pink" mobile development project, which is where much of the Danger talent landed after the 2008 acquisition. But sources close to the project said Pink suffered from inexperienced management with little mobile industry experience, as well as the kind of infighting that former Microsoft vice president Dick Brass outlined in his February op-ed piece in The New York Times.

For these and other reasons, Pink endured numerous delays, and the consensus is that the project reached completion around 18 months behind schedule. In a mobile market that's hitting on all cylinders, that can doom any product development effort.

Kin devices, when they did reach the market, were obviously not feature complete. Microsoft probably would have sold more Sidekick devices if it had chosen to continue their development.

5. No Third Party Apps = No Interest

It's not enough to say you're going to support it later on. Young people want it now, and it doesn't matter what "it" is. For Microsoft to launch Kin without any connection to its mobile apps marketplace was a big mistake, especially since Kin arrived at a time when Apple's App Store was riding high.

No matter what you think about the quality of the apps for sale on the App Store, a marketplace is now a staple of any company's mobile strategy. Plus, if you're marketing a phone based on its social networking attributes, you want it to be as connected and extensible as possible.