Verizon may revive Kin phones

Carrier may be holding a fire sale to clear out inventory, analysts say

Verizon Wireless plans to resurrect thousands of retired Microsoft Kin phones as feature phones -- without wireless data capability -- later this year, according to a leaked document on a tech Web site.

A Verizon spokeswoman would not comment Monday on the report, which appeared late last week on PPCGeeks , showing a fourth-quarter sales roadmap for various Verizon phones. In the PDF that the Web site obtained, the Kin One and Kin Two phones are renamed Kin Onem and Kin Twom.

Microsoftpulled the plug on the Kin phones in June, about two months after introducing them, probably due to poor sales.

Analysts said Verizon may be hoping to clear out a stockpile of thousands of Kin devices stored in warehouses, although they questioned the wisdom of the move since Microsoft is trying to stage a mobile comeback with its new Windows Phone 7 devices on the market.

Verizon will eventually carry at least one WP7 phone next year, but doesn't currently have a WP7 phone for sale, although competitors AT&T and T-Mobile do.

"It's a fire sale - getting rid of inventory," said Jack Gold, an analyst at J. Gold Associates. "But it does deliver a mixed message in that WP7 devices are the future and these Kin devices are really a dead end."

The success of the fire sale could come down to whether Verizon sells the Kin Onem and Kin Twom at a low enough price, Gold said. Nobody has speculated on what they could cost as feature phones, although Verizon dropped the prices down to $29 for Kin One and $49 for Kin Two before Microsoft said in June it would not sell Kins in Europe and would absorb its Kin developers into its WP7 effort.

Price was a factor in the failure, and reports have indicated only about 10,000 were actually sold. Specifically, many users objected to paying for a $30 per month data plan on top of voice and text plans when the Kins didn't download apps and didn't have all the features of many other smartphones .

"A lot of the Kin phones were built and they didn't sell well largely because of the data plans," said Rob Enderle, an analyst at Enderle Group. By comparison, with the Microsoft Sidekick, data plans were heavily discounted, he noted.

"So this looks like an attempt to reduce the stockpile of phones," Enderle added. "They may have been sold in bulk and someone is blowing away the inventory now. Priced as a feature phone they could actually be a deal."

The tech Web site Engadget said it confirmed the PPCGeeks report and that a source had said data features won't be in the resurrected devices. That debundling of data leaves out features like the Kin Loop , which is designed to show the many things happening in a user's social world. It also excludes Kin Studio, which was highly praised for allowing users to keep a digital journal of texts, call history, photos and videos in a cloud -based server.

But evidently as a feature phone, users would still get voice and text functions as well as Wi-Fi access to Zune Pass for $15 more a month to listen to music in Microsoft's Zune Marketplace.

Analysts said that what Verizon is reportedly doing with the Kin could be used as a business school case study for what to do with a failed product. "It's either sell them for something or recycle them for parts," Enderle said.

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Tags mobileMicrosoftsmartphonestelecommunicationPhonesconsumer electronicsat&tMobile and WirelessMobile Apps and ServicesVerizon Wireless

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Matt Hamblen

Computerworld (US)
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