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
7/20/2010 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.
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