5 Lessons Learned From the Microsoft Kin Debacle

Microsoft (s msft) effectively killed off the Kin handset yesterday, just six weeks after the phones initially launched. Kin One and Two were targeted at texting teens that are also embracing social networks, but the devices fell short of the mark in several places. For one thing, updates from various social services can clutter up the display and cause focus issues for the user, as Om saw first-hand when reviewing the phones. Besides, phones with a social bent should allow simple re-tweets, and in today’s world of Droid Does, Engadget found that Kin can’t. Add in a lack of software applications, smartphone-priced data plans on a glorified feature-phone for low-budget teens and talk of 18-month delays for the Kin project and you get the picture: a Kin-fusing product.

There are (or were) some positive aspects to the Kin handsets, however. Integration with Microsoft’s Zune platform is a feature that Windows Mobile enthusiasts have craved since the Zune launched in 2006. Simple sharing of content through the Kin’s Spot interface is also nice. And the Kin Studio, which provides a cloud history of nearly all activities on the Kin — call logs, images captured by the device camera, contact data, RSS feeds, social networking updates and short videos — is a progressive approach to blending information between the phone and the web. Given the good, which it should re-use, and the bad, Microsoft should use the Kin project as a learning experience for Windows Phone 7, due out later this year.

Carrier Relationships — With a flood of capable smartphone competitors, Microsoft must realize that it needs the carriers more than the carriers need Microsoft. AT&T (s t) is doing just fine with the iPhone (s aapl), thank you. Verizon (s vz), Sprint (s s) and T-Mobile are quite content with a range of solid Android devices of which are selling 160,000 per day. And all four carriers offer BlackBerry (s rimm) handsets as well. That means Microsoft has to earn both a spot on store shelves and earn the marketing dollars that can make or break a handset. Need another example? Perhaps the largest failure of the Kin was the full-featured data plan pricing on a not-so-full-featured handset — a good carrier relationship would have meant more attractive monthly bills for Kin customers.

Discount Added Services — Technically, there is no Zune Phone, but Kin and Windows Phone 7 are the closest thing to such an animal. Microsoft did well to integrate Zune in the Kin but again made a pricing mistake. Why charge the same $15 per month for Zune access on a phone when sales of the device will cannibalize standalone Zune hardware sales? Perhaps $10 a month for Zune on one device and $15 a month for both a Zune player and a Zune-capable Windows Phone 7 handest will spur sales of both the hardware devices and the service.

Build a solid base and iterate often — Microsoft has had enough time and resources to build Windows Phone 7 at this point, but it doesn’t have to compete at every level on day one. If the reports of nearly 1.5-years worth of delays on Kin are true — and it stands to reason they are, since the phones might have had a chance 18 months ago — Microsoft must get Windows Phone 7 to partners on time. Even more important, platform deficiencies must be addressed every six months at a minimum, and not break existing apps. The longer Microsoft is effectively out of the smartphone market, the harder it will be to get back in the market.

Consider a management change — There’s no easy way to say this, but Microsoft should seriously review the upper level talent it has in place. The Office and Windows areas aren’t the current problems — the mobile device area is missing out on the hottest growing market right now. In May — right after the exciting Courier project was canceled — Microsoft’s Entertainment & Device Division lost two key players in Robbie Bach and J. Allard, effectively giving CEO Steve Ballmer more control over this area.  Perhaps Ballmer made the decision to kill Kin, but the fact is, the product failed on his watch. And it’s difficult to give Ballmer the benefit of the doubt when he fails to see Android in the grand-scheme of mobile. Microsoft must get and keep the right talent in charge of Windows Phone 7. Indeed, Mary Jo Foley suspects that Windows President Steven Sinofsky could take the reigns but such a move could negate the next lesson learned.

Embrace services beyond Microsoft  (*gasp!*) — Typical Microsoft mobile approaches include tight integration with other Microsoft products and services. Office Mobile, Exchange and Outlook support have been the bread and butter for Windows Mobile since, well, forever. That strategy helps lock in customers to a Microsoft world, but this is 2010 — it’s time to open up and Kin made the first attempts to do so. Sure, you needed a Microsoft Windows Live account for Kin, but you still had access to Facebook, Twitter, and MySpace. Unfortunately, Kin stopped the minimal openness to other platforms there — adding email from Gmail or Yahoo! is doable on a Kin, but can’t be a second-class citizen on Windows Phone 7. It’s time for Microsoft to consider that it may gain more customers by complementing the heavy ties to other Microsoft products with a broader mix of offerings — even if those come from another company.

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