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 11:50:03 PM
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.
RE: Numbers are a little disingenuous
7/20/2010 7:02:12 AM
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? :\
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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