Analysts Put Positive Spin On Death Of Microsoft Kin

Microsoft abruptly discontinued its Kin line of social-networking-focused phones and absorbed that product’s team into its Windows Phone 7 workgroup. Considering Windows Phone 7 needs to be a hit for Microsoft to stay competitive against Google and Apple, Kin’s demise might prove a long-term benefit to the company.

Microsoft abruptly discontinued its Kin line of social-networking-focused phones on 30 June, but the impact on the company’s longer-term mobile efforts is expected to be small. The Kin phones had been targeted exclusively at the teenager and young-adult demographic; Microsoft’s other efforts in the mobile space, particularly the upcoming Windows Phone 7, are focused on much broader swaths of consumers and the enterprise.

Windows Phone 7

With regard to Kin’s demise, “I don’t think the impact on Windows Phone 7 is all that meaningful,” Charles Golvin, an analyst with Forrester, told eWEEK in a July 1 interview. “They were going to have three platforms running: Windows Mobile 6.5 to continue their focus in the enterprise, Phone 7 was going to be their primary focus and emphasis in the consumer market, and Kin was a separate platform.”

That separation, Golvin added, means the damage to Windows Phone 7 from Kin’s demise should likely be minimal. “Because they chose to brand Kin as a Windows phone, it’s a question of how much of a foul taste will be left in people’s mouths,” he said. “But I think it’s going to be relatively minor; mainstream consumers have a relatively short memory for this sort of thing.”

Originally introduced on 13 May, the Kin One and Kin Two featured hardware and applications tailored to deliver a constant stream of updates from the user’s social networks. The devices allowed for seamless uploading of photos and other data to the cloud, but they also lacked games, Flash support for the browser, and the ability to download third-party applications.

“Microsoft has made the decision to focus on the Windows Phone 7 launch and will not ship Kin in Europe this fall as planned,” reads a 30 June statement from Microsoft. “Additionally, we are integrating our Kin team with the Windows Phone 7 team, incorporating valuable ideas and technologies from Kin into future Windows Phone releases. We will continue to work with Verizon in the U.S. to sell current Kin phones.”

On the morning of 2 July, the stubby Kin One and more rectangular Kin Two were both available on Amazon.com for a mere penny “with new service plan.” Analysts have cited the service plans as a possible cause of Kin’s death: ranging between $39.99 for 450 minutes to $69.99 for unlimited time, and paired with a monthly $29.99 for data, they may have proven too expensive for either cost-conscious parents or teenagers with limited independent income.

Kin’s Death

Microsoft’s recent shakeup of its Entertainment and Devices Division may also have been partially responsible for Kin’s death. The Division is responsible not only for the Kin, but also a variety of consumer-centric products such as the Zune portable media player and the Xbox gaming franchise.

In the wake of that reorganisation, Microsoft may be more willing to trash its underperforming products. “Typical Microsoft behavior is to deny there is a problem for several years and then quietly kill the product,” Rob Enderle, principal analyst of the Enderle Group, wrote in a 1 July email to eWEEK. “If they have learned, and so far this is just an exception, to find and correct problems more quickly, they may be able to take more chances.”

Kin’s death allows Microsoft to sweep its decks in preparation for the Windows Phone 7 rollout—a good thing in the view of some analysts, who see the upcoming smartphone operating system as the company’s last best hope for staying competitive against rivals such as the Apple iPhone.

“Microsoft did not do an adequate job of differentiating itself from the other vendors and defining Kin’s value proposition,” Jack Gold, principal analyst of J. Gold Associates, wrote in a 1 July email to eWEEK. “I think they now realize that Windows Phone 7 has to be a big success if they want to stay in the mobile game.”

Expected to launch on a variety of carriers before the end of 2010, Windows Phone 7 features a user interface markedly different from the rival iPhone and Google Android platforms, which emphasize pages of standalone applications; in place of that model, Windows Phone 7 condenses Web content and applications into a set of subject-specific “Hubs,” such as “Games” or “Office.”

Microsoft sees Windows Phone 7 as a total reboot of its smartphone franchise, where it has steadily been losing market-share over the past several quarters to aggressive competitors. While used by a number of SMBs (small- to medium-sized businesses) and the enterprise, its Windows Mobile 6.x smartphones have not gained similar traction among consumers, and have been faulted by some for poor user-interface and lack of third-party apps compared to Google Android devices and the iPhone.

With that in mind, Microsoft has been feverishly preparing the way for Windows Phone 7’s rollout to the larger world, pushing at both business-application and games developers to create content for the new platform.

According to Gold, that means ensuring Windows Phone 7 has a picture-perfect launch. “It needs to be rock-solid at release, and compelling to get users to buy,” he wrote. But the company could face something of an uphill battle as it attempts to regain mind- and market-share in the smartphone space: “With all the activity around iPhone and the new Droids, and BlackBerry due for a major update soon, it may be too late for Microsoft to have any real effect in the market with Windows Phone 7.”