Verizon Cuts Microsoft Kin Price - InformationWeek

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6/29/2010
12:47 PM
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Verizon Cuts Microsoft Kin Price

The social networking-oriented phones were released a month ago to lukewarm reception.

Microsoft KIN Phone
(click image for larger view)
Microsoft KIN Phone
Nearly a month after they were first released, Verizon Wireless has dramatically reduced the prices of its two Microsoft Windows Mobile-based Kin handsets.

The Kin One, a lower-end phone, dropped from $49.99 to $29.99 and Kin Two is now $49.99, down from its original price of $99.99, both after a $100 mail-in rebate and two-year customer agreement. The phones were launched on May 13 and promoted heavily to a younger, social networking-oriented audience. Both emphasized text messaging, status updates, e-mail, camera, and video features.

Both Verizon Wireless and Microsoft have not released sales figures for the two phones, but observers say they have been lackluster and not up to expectations. Sales of the Kin phones have also been hurt by the carrier's mandatory $30 per month service plan, which critics have blasted as being too high, given the phones' limited capabilities. Neither phone offers apps, the ability to share photos and Web videos via Twitter, a calendar, or GPS. Although Microsoft is expected to release its Windows Phone 7 operating system later this year, it is unclear whether the Kin will ever run on it.

While the price cut will help sales of the Kin phones, it will not make them a new tour de force in the handset market, as they are still mired in a kind of feature phone/smartphone limbo, said Michael Morgan, a senior mobile devices analyst at ABI Research.

The Kin "was thought to be a new concept and for Microsoft to dip its toes in the water with Windows 7 principles,'' said Morgan, adding that he's not clear what platform the Kins are running on. "Suddenly they have a new user interface and phone and I have no technology path I was able to find to bring us there." The phones may be based on the Danger technology Microsoft acquired that was used on the Sidekick, he said.

One of the features of the Kin phones that has received positive reviews is its Studio web service, which automatically uploads everything created on the phone to Microsoft servers. This includes photos, videos text messages, and social media updates. Users can access the information through a web interface.

But Morgan said that while the cloud-based app to support the service is a good idea for Microsoft, it is "sticky" for users. "In a sense, they own your data in the cloud... [but] you're not apt to switch away from both the carrier and the operating system." The fact that the service is only available on Kin through Verizon and geared at a younger, social networking-focused demographic is "a little too targeted, and they would have done better had they not just gone with Verizon," he said.

The two Kins are both slider phones, but with slightly different looks. Kin One has an oval shape, with a compact QWERTY keypad, 4 GB of memory, a 5-megapixel camera, an LED flash, and SD video recording, while the Kin Two has a rectangular shape with a larger keypad and display, 8 GB of memory, an 8-megapixel camera with flash, and HD video recording. Both come with Zune media players and a web browser.

"I'm having trouble calling this phone a smartphone,'' said Morgan, since neither Kin phone has the ability to run third-party apps and doesn't have what he referred to as "a high-level operating system" like Windows 7, Android, or the iPhone OS. "It really comes across and is being sold as a feature phone."

In 2009, the Windows Mobile family had a 10.1% worldwide market share, according to ABI Research. That figure has dropped to about 9% so far in 2010 "as we wait for Windows 7 to come into play,'' said Morgan.

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