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The phone was rumored to have sold around 8,000 units

Microsoft's Kin smartphones made Palm's struggling Pre look like marketing genius.  Released exclusively on Verizon about 2 months back, the pair of phones marked the culmination of Microsoft's reportedly $500M USD purchase of Danger (makers of the Sidekick).

The phones lacked features found in Android, the iPhone, or other modern smartphones and were marketed with a series of controversy-laden ads.  In the end they reportedly sold around 8,000 units.

Following Microsoft's decision to pull the plug on future Kin-related endeavors, Verizon this week decided that it had seen enough.  It is ceasing sales of the phones, pulling them from store shelves, and shipping the remaining supply (which is mostly untouched) back to Microsoft.

While it's no real skin off Verizon's back considering the carrier's well-packed stable of smart phones and plethora of smart phones, the metrics of the screw-up for Microsoft are staggering.

If you assume to $500M USD Danger purchase cost and that 8,000 units were sold, that works out to a cost to Microsoft of $62,500 per phone.  At that rate Microsoft might as well have been giving away small bars of gold with a phone built in.  And that's not even including the two years of engineering that Microsoft financed to launch the phone and the extensive advertising campaign.

As Microsoft readies Windows Phone 7, its surely a bit nervous as it watches Verizon nail Kin's coffin shut.  Its room for error in the smartphone arena is close to exhausted.

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Numbers are a little disingenuous
By nafhan on 7/19/2010 3:46:00 PM , Rating: 5
The $60,000 per phone is a little disingenuous for a couple reasons.
1. It assumes that there were no further costs after the Danger acquisition. So, the actual amount lost was probably quite a bit higher than $500 mil.
2. If MS had given up a year ago and not launched Kin at all they certainly would have saved some money, but the amount lost per phone would have been infinite!

RE: Numbers are a little disingenuous
By ghost03 on 7/19/2010 5:41:40 PM , Rating: 2
and another reason...

3.) Microsoft still has a load of intellectual property (among other resources) from danger, which can be rolled into other products.

They only lost $60k per phone if Danger, and all of its assets, vanished into thin air upon canceling the product.

Please ease off of the misleading, overly-dramatic headlines DT.

By RamarC on 7/19/2010 8:31:48 PM , Rating: 2
if MS has good accountants (and they do), they'll likely be able to create a huge r&d loss and declare the remaining product, mfg equipment, and retail sales contracts worthless. much of thoses losses will be tax deductible or have some tax credits. so, the "real" loss may be smaller but the loss filed with the SEC will be HUGE!

RE: Numbers are a little disingenuous
By ChristopherO on 7/19/2010 11:50:03 PM , Rating: 2
So wait, if I buy several Kin, does that mean Microsoft will pay off my mortgage??? That'd be nice. I only wish.

Seriously though as others have said. MS didn't buy Danger because they loved the sidekick. They needed developer talent and patents. Danger had a lot of devs, and a lot of IP.

I'm sure that will get rolled into Windows Phone. DT *is* being overly dramatic here, because they would have never wrote the headline if the Kin never existed... And it wouldn't have surprised everyone if MS transferred all the Danger assets to Windows Phone as soon as they acquired the company.

The surprising thing was that they released the Kin to begin with. It was just, well, uncalled for. At the very least it would have *only* made sense with T-Mobile if it was offered to Sidekick users as an upgrade. Outside of that, very little purpose.

And lets face it... Sidekick is *yesterday's* news, but they did make a huge splash when it was released -- it was a trendy thing for teens to have. The Danger crew *does* know how to make a splash, and that's something apparently missing at the mobile division at Microsoft.

By robinthakur on 7/20/2010 7:02:12 AM , Rating: 2
You're right, and a great way to make Danger's devs stay on board is to incorporate their valuable IP and experience into a device which is seen as a complete joke throughout the industry thanks to a lack of management and leadership from the top at Microsoft, god-awful marketing, and half-assed execution. The Kin was an interesting concept device if executed correctly, but things like the lacking facebook integration (only the news feed was really visible) and the odd retro-fitted presence of Twitter integration not to mention the other lacking things like Geotagging and strangely absent features made it seem like it was better as a concept.

As a device that made it to market, it actually mmanages to make Apple's handling of the IP4 fiasco look competant which is saying something. The most sensible thing MS could have done for their bottom line was kill it, after all they know the very real PR damage of having an embarassingly unpopular product floating around long after its sell-by date, destined only to be a drain on resources and morale(Zune, Vista, RROD) Thank god the Courier never made it out of R&D at this rate!! You KNOW that if it had come out it would be ridiculously expensive, lacking seemingly obvious features and sell practically nothing. What on earth is going on at Microsoft these days? I would like to believe that they'll get their act together for Windows Phone 7 but I won't hold my breath, Shareholders, why is Balmer still in his job? :\

By Chocobollz on 7/20/2010 10:52:56 AM , Rating: 2
2. If MS had given up a year ago and not launched Kin at all they certainly would have saved some money, but the amount lost per phone would have been infinite!

LOL yeah but I think it'll be more like a division by zero error! LOL

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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