Microsoft CEO Admits Kin Phone Was A Mistake

In a surprisingly frank admission, Microsoft CEO Steve Ballmer has said the company's Kin phones were a mistake.

Ballmer's comments were not so much about the handsets themselves, but rather the way they distracted the company's attention from the upcoming Windows Phone 7 system.

Microsoft Kin Phone Fails to Catch On

The company released two handsets, the Kin One and Kin Two, earlier this year after several years of development. Although the phones received positive reviews, they failed to catch on. The major problem: while they appeared to be aimed at teenagers and young adults, the Kins were classed as smartphones by Verizon and thus carried hefty monthly service fees and were less than affordable for the target audience.

The phones lasted just two months before Microsoft decided to axe any future marketing. Some analysts estimate the company sold less than 10,000 units. (Source: electronista.com)

Ballmer: "Got To Stay Focused"

Speaking this week to the Seattle Times, Ballmer said that manufacturing and marketing a phone at the same time as preparing to unveil a new mobile operating system was a mistake.

"You only get so many things you can really talk about, communicate, work on with the consumer," he said. "You've got to be bold, you've got to look forward and you've got to stay focused."

But there was another problem with the two-pronged marketing: it came across as confusing that the company was hyping up its new operating system, yet its own handset didn't run either Windows Phone 7 or its predecessor Windows Mobile 6.5.

Short-Term Hype, Long-Term Profits

In the same interview, Ballmer discussed the strategy for promoting Windows Phone 7. He said that it wouldn't be effective to concentrate solely on money-making strategies right away and that the key was to establish the system as soon as possible.

"People gotta want these... If we start the popularity chain and start kind of the buzz around these things, we'll be able to make some money off them." (Source: nwsource.com)

While that might seem a short-sighted approach, it may be that Ballmer is simply being realistic about finances. Given various reports putting the launch and marketing costs of the system anywhere in the hundreds of millions of dollars range, or even into the billions, there's little prospect of the company turning an overall profit on Windows Phone 7 in the immediate future.

As it's a system designed to be carried by multiple manufacturers and networks (as opposed to the one-company, one-handset approach of Apple and the iPhone), Ballmer is correct to acknowledge that momentum will be the key to the system's success.