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
This article is over a month old, voting and posting comments is disabled
7/19/2010 10:17:35 PM
Low sales doesn't equate to bad device. It's just a device with low sales. Ferrari has low sales, but does that make it worse than like a Kia Sportage?
Sure the Kin is hardly successful, but if the 8000 ppl who purchased one are loving it, than what was bad about it, aside from sales? I couldn't tell you if 8000 ppl actually like it or dislike it.
7/20/2010 12:37:49 AM
Back in the 80s~92.
The Amiga computer was the most powerful PC you could get.
- Multi-tasking OS since 1985... it would take MS 10 years to come up with Windows95... and Apple 15 years for MacOS X.
- Costs less than a "PC CLone" and of course Macs ($5000+)
- Color graphics with 4096 colors (no add-on card required)
- Stereo Sound (no add-on card required)
- Fast. A 7mhz Amiga runs circles around a 25Mhz 386 with Win3.0
In the end, about 1 or 2 millions Amigas were sold world-wide.
They were very good computers than most people could afford compared to anything else. But obviously, they failed in the market due to the company, Commodore being completely stupid.
7/20/2010 10:48:44 AM
What people appear not to know about this story is that Microsoft bought Danger for its software, not just its programmers. They continued development for a while and at some point management decided that this being Microsoft every product must be based on Windows. So the dumped the investment they had just made, totally disheartening the Danger developers they had brought in house and set back the Kin project by 18 months.
The result is likely to be that many of those developers will leave Microsoft and the entire investment will have been lost.
I wonder what the figures are for the Xbox... without even adjusting for inflation that has lost over $10 billion. A more valid figure would be loses per customer since over 50% of the previous version of the Xbox failed.
7/20/2010 6:46:33 AM
Oh come on, be fair, this is a complete disaster and how you can compare it to Ferrari's businesss model is hilarious. I bet Microsoft is especially overjoyed that those 8000 people are happy with their device...! See how much those 8000 people love it when all updates stop and Verizon don't want to know about supporting it, when they check out other phones and realise that they've been comprehensively ripped off.
The phone clearly had issues which made it unappealing to customers, mostly to do with the contract pricing, weird and offputting adverts, but also to do with strange quirks in the software and unfinished features when it shipped. The little one is quite cool looking, with phenomenal battery life, and an interesting (sometimes broken) approach to Social Networking integration, but considering the features in the segment they were introduced in and for the price this was an utter train wreck that many saw coming long before it hit the shelves. Everyone apart from possibly Microsoft apparently, which should make those waiting for WP7 slightly nervous as a lot of the people working on Kin are now working there. Its clear why MS is myopically following Apple's path of development and attempting to ape their marketing with their new OS because they clearly have no clue how to market their own products, which is sad when you look at a success story like W7.
"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates
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