Microsoft Kills Kin One and Kin Two Mobile Phones

Microsoft Corp. scrapped the new Kin social-networking smartphone because sales fell well short of the company’s expectations, the company has confirmed.

Microsoft Corp. scrapped the new Kin social-networking smartphone because sales fell well short of the company’s expectations, the company has confirmed today, the Daily Telegraph (UK) reports.

The phone’s high price contributed to lackluster demand, said the person, who declined to be named because the discussions were private. Microsoft announced plans to end work on the Kin earlier today, saying it would focus on Windows Phone 7 software. The Kin One and Kin Two were unveiled in the United States just two months ago.

Microsoft’s Kin line, sold through Verizon Wireless, marked company’s firstmajor foray into the hardware design of a mobile phone. It was part of a dual strategy of developing its own phone while working on new Windows software for other companies’ handsets. Verizon’s price cuts of the Kin on June 28 may have come too late to save the phone.

“Sales weren’t going that well at Verizon, so better to kill it than have it fester on,” said Ken Dulaney, a Gartner Inc. analyst in Redwood City, California. “Verizon did a very poor job advertising this thing. The price of the data plan was a killer.”

Verizon required an unlimited data plan for $29.99, plus a voice plan. The phones were released May 6 online and went on sale in stores May 13. Those models will remain available.

“We will continue to work with Verizon in the U.S. to sell current Kin phones,” Redmond, Washington-based Microsoft said in a statement. Brenda Raney, a spokeswoman for Basking Ridge, New Jersey- based Verizon Wireless, said the Kin “is still an important part of our portfolio.”

Verizon cut the price of the Kin One to $29.99 from $49.99, with a $100 discount and a two-year contract. The price of the Kin Two, which has a larger screen and takes sharper photos, was reduced to $49.99 from $99.99.

Microsoft will instead focus on its new mobile operating system, Windows Phone 7, and will be folding Kin developers in to its main mobile development team.

“We have made this decision to focus exclusively on Windows Phone 7 and we will not ship Kin in Europe this autumn as planned,” said Microsoft in a statement. “Additionally we are integrating our Kin team with the Windows Phone 7 team, incorporating valuable ideas and technologies from Kin in to future Windows Phone releases.”

Microsoft’s Windows operating system accounted for 6.9 percent of the worldwide smartphone-software market in the first quarter, down from 10.8 percent a year earlier, according to Michael Morgan, an analyst at ABI Research. Shipments of the iPhone rose to 15.8 percent, while Android-based phones took 9.9 percent.

Microsoft’s attempts to create an entry-level “social” phone earned mixed reviews, with many industry experts supporting the sentiment but lamenting the execution.

Popular tech blogs like Engadget and Gizmodo was highly critical of the Kin’s user interface. Engadget said: “decisions about how things should work were made almost arbitarily, without anyone stopping to test them in the real world.” [via Daily Telegraph (UK) and Engadget]

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