Microsoft Kin Death Raises Windows Phone 7 Questions

Out-priced target demographic

Long before the Kin’s ignoble bargain-bin finale, analysts suggested several weak points in the phones’ marketing strategy. Prime among them: the cost of the monthly data plans. Calling plans that ranged from $39.99 (£26.29) for 450 minutes to $69.99 (£46.02) for unlimited time, paired with a monthly $29.99 (£19.72) for data, may have proven too expensive for both cost-conscious parents and teenagers making minimum wage at the local mall. In addition, there were questions about how well Microsoft would be able to integrate the Kin phones with its other services.

“Success will depend on how well Studio and Windows Live support integrate with the phone, and since only Microsoft can deploy a new service to the device, how well it does so is critical,” Jack Gold, principal analyst of J. Gold Associates, wrote in an April 13 research note soon after the Kin phones’ unveiling. “Success will also depend on what types of service plans are available, how they’re priced and how good the service is (i.e., the AT&T/iPhone fiasco would be a killer for Kin). Finally, what specialised services will the carriers offer to try and garner some of the potential cloud revenue?”

With regard to the last question, the answer was evidently: “Not much.”

Microsoft’s internal politics may have also hastened Kin’s date with the reaper. In late May, the company’s Entertainment and Devices Division underwent a massive shakeup, one that saw the quick departures of Robbie Bach, the unit’s president, and J Allard, its senior vice president of Design and Development. In addition to Kin, the Division is also responsible for other consumer-centric products such as the Xbox franchise and the Zune media player.

In the wake of that shakeup, Microsoft CEO Steve Ballmer promoted Senior Vice President Andy Lees to run the company’s Mobile Communications Business, and Senior Vice President Don Mattrick to handle the Interactive Entertainment Business. “Concurrent with Robbie’s retirement, I am making several organisation changes to ensure we have the right leaders in the right positions as we set ourselves up for the next big wave of products and services,” Ballmer wrote in a memo at the time.

Death of Courier tablet

The shakeup also likely resulted in the death of its “Courier” tablet PC project. Although it never managed to exit the development lab, early video and photo leaks on tech blogs hinted at a device with two touch screens folded on a central hinge—like a traditional book—and capable of letting users write notes or draw longhand.

“It’s in Microsoft’s DNA to continually develop and incubate new technologies in order to foster productivity and creativity,” Frank Shaw, Microsoft’s corporate vice president of communications, wrote in an April 30 statement following rumors of Courier’s demise. “The Courier project is an example of this type of effort and its technologies will be evaluated for use in future Microsoft offerings.”

Note how that statement echoes the company’s “incorporating valuable ideas and technologies from Kin into future Windows Phone releases” missive from June 30. At least from the outside, it seems that Microsoft is sweeping its decks clean in preparation for the launch of Windows Phone 7, a complete reboot of its smartphone operating-system franchise.