Microsoft killing its 'Kin' social network phone

Microsoft on Wednesday said that it is killing the Kin line of mobile telephones it unveiled in April to win over young people enthralled by online social networking.

"Microsoft has made the decision to focus on the Windows Phone 7 launch and will not ship Kin in Europe this fall as planned," the US technology giant said in an email response to an AFP inquiry.

"Additionally, we are integrating our Kin team with the Windows Phone 7 team, incorporating valuable ideas and technologies from Kin into future Windows Phone releases."

Microsoft added that it will continue to work with US telecom service provider Verizon to sell Kin smartphones that have already been made.

The "Kin One" and "Kin Two" phones, which both feature touchscreens and slideout keyboards, were being manufactured by Japan's Sharp and were made available in the United States through Verizon Wireless in May.

"I am surprised the product ever saw the light of day," said analyst Matt Rosoff of Directions On Microsoft, a private firm devoted to tracking the US technology colossus. "I am not surprised they killed it."

The Kin smartphone platform launch had been delayed and competed with Windows Phone 7 devices due for release later this year.

"It made no sense for them to release Kin in the first place," Rosoff said. "This is what they should have done all along."

Eliminating Kin models after less than two months on the market could mean that sales were dismal and that Microsoft wants to fold any related financial loss into its fourth fiscal quarter, which ended Wednesday.

"It seemed like the news caught even the Kin team by surprise today," Rosoff said.

Kin smartphones had been introduced at a press event by Robbie Bach, who is being replaced as president of Microsoft's Entertainment and Devices Division as part of a shake-up announced in May.

Microsoft is replacing top executives at its gaming and mobile devices division, which has stumbled in the smartphone and tablet computer markets.

Bach, 48, will retire by year's end from his post. Bach joined the company in 1988.

Entertainment devices chief technology officer James "J" Allard will also leave Microsoft, becoming a strategic adviser to chief executive Steve Ballmer.

Products launched by the division include Xbox 360 videogame consoles, blockbuster videogames, and Zune gadgets for digital music and video.

Don Mattrick will remain head of Microsoft's Interactive Entertainment Business and Andy Lees will stay in charge of the Mobile Communications Business but both men will report directly to Ballmer as of July 1.

"I suspect this is Ballmer taking a very close look at the mobile business and making some decisions about what stays and what goes," Rosoff said of the Kin news.

Microsoft's videogame business has been doing well, with strong sales of Xbox 360 consoles and titles.

Microsoft grabbed headlines in mid-June with "Kinect," technology that lets players use Xbox 360 consoles with natural gestures instead of handheld controllers.

It is in the hot smartphone and tablet computer markets that Microsoft has suffered setbacks that had industry insiders convinced that mobile division executives were in Ballmer's crosshairs.

Apple iPhones have become must-have devices and Google is seizing market share with smartphones based on its Android software.

Long-time Microsoft partner Hewlett-Packard recently announced it is acquiring Palm and intends to use that company's operating system for mobile devices such as smartphones and tablet computers.

Microsoft's new version of its Windows mobile operating system due for release later this year "is going to be a big reset" but will come after iPhones have had nearly four years to win fans.