Microsoft Likely Lost Over $60,000 Per Kin Phone as Verizon Pulls the Plug
July 19, 2010 1:07 PM
comment(s) - last by
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
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.
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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RE: Numbers are a little disingenuous
7/19/2010 5:41:40 PM
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.
RE: Numbers are a little disingenuous
7/19/2010 8:31:48 PM
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!
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