Kin is dead

Less than 2 months after being launched at Verizon Wireless and three months after its unveiling at a San Francisco bar at 10 in the morning, Microsoft Corp. has shut down its Kin initiative.
Published reports indicated that the computer software giant ditched the Kin plan and has instead folded the Kin team into the company’s highly-anticipated Windows Phone 7 platform that it unveiled at this year’s Mobile World Congress event in Barcelona, Spain. Rumors spreading around the Internet indicated that the Kin was basically a dud having sold less than 10,000 units since its launch at Verizon Wireless on May 6. For comparison, Apple Inc. recently announced it sold 1.7 million iPhone 4 devices during its first three days of availability.
What went wrong?
Analysts noted several possibilities for the Kin’s short life, including its lack of capabilities when compared to more traditional smartphones as well as service pricing that seemed out of line with the target market.
“The Kin may have been too tightly focused to keep costs down,” noted Ross Rubin, executive director of industry analysis at The NPD Group. “As with Palm devices, consumers are being drawn to larger screens of at least 3.5 inches or more. This screen size is important for customers that are increasingly using their phones for web browsing. It’s just too difficult to cram that much information onto a small screen.”
Others noted that the pricing model the device was saddled with from Verizon Wireless also came into play.
“As far as what went wrong, keep in mind that the Kin is not a smartphone, but has been positioned as one from a service pricing standpoint,” said Brad Akyuz, senior analyst of mobile devices at Current Analysis Inc. “The mandatory $30 monthly data plan has been a major barrier to success for the Kin as consumers have begun understanding the ‘value’ of smartphones, and they would buy a smartphone instead of the Kin, which lacks support for third party applications. Considering the price sensitivity of its target crowd, the chances of the Kin succeeding with such a service pricing scheme was quite low.”
Rubin agreed, but noted that Verizon Wireless had little choice but to require the smartphone data package for the device as it’s selling point of backing up consumer multimedia content to the cloud was pushing data usage.
“The device was targeting active ‘sharers’ and I think that is where there was a disconnect,” Rubin explained.
Both agreed that the move to kill the Kin twins could be a boon for Microsoft’s Mobile 7 plans.
“I believe Microsoft has done the right thing by pulling the plug early as it needs to focus entirely on the upcoming Windows Mobile 7, which does have the potential to put Microsoft back in the smartphone game,” Akyuz said. “Both Kin devices are decent from a hardware perspective, and offer users with a unique social networking experience with services like the Kin Studio, and I am sure that Microsoft will leverage these positive nuances for the Windows Mobile 7.”
“I don’t think it’s all bad news for Microsoft,” Rubin added. “Similar to the conflict Google was beginning to have with its Nexus One in regards to other device makers, Kin was in some ways competing with Mobile 7. Having the Kin devices out of the picture will remove that conflict.”
The loss of the Kin devices should not have much of an impact for Verizon Wireless, especially if the rumored sales figures are to be believed. The industry’s largest carrier has an ever-growing stable of smartphones, including its Google Inc. Android-powered Droid lineup that is receiving a lot of the carrier’s marketing might, as well as Palm Inc.’s Pre Plus and Pixi Plus models that pack more features than the Kins at a similar price. In addition, the carrier has a number of Blackberry devices from Research In Motion targeting the business market as well as a number of so-called “quick messaging” devices that include a QWERTY keyboard targeting heavy messaging users that do not require the $30 per month smartphone data package.