Microsoft and the malaise of its stillborn projects

WIRED:Perhaps it is the firm's scale that has caused development of the Kin and Courier to backfire, writes DANNY O'BRIEN

WHAT IS going on at Microsoft? Last April, the company announced, with great fanfare, the launch of their Kin range of mobile phones. Less than three months later, the company killed the product, announcing that it was ending production of the US version and cancelling any global roll-out.

The estimated cost of designing and launching the Kin was close to $1 billion (€774 billion). The estimated number sold was appreciably less than 10,000.

Kin was the culmination of “Project Pink”, the internal future phone platform being designed by Microsoft with staff the company obtained from its buyout of the Silicon Valley start-up Danger in 2008. Danger was behind the Sidekick “hiptop”, a combined phone-and-messaging device similar to the BlackBerry smartphone.

While the Sidekick never really established a clear market presence, its small team was highly regarded in the industry, and quickly put to work internally to come up with a radical new mobile platform. The mastermind behind the plan was J Allard, who advocated that Microsoft embrace the internet in the mid-1990s, and lobbied for it to enter the games console market with the Xbox.

Project Pink was meant to bring Microsoft’s “a computer on every desktop” mantra to the world of the smartphone: an affordable internet, social media-friendly phone that could do everything that mobiles 10 times the price could muster.

The trick was the Danger model of mobile design – keep the phone itself relatively dumb, but push all the hard work into servers in the cloud. The Kin was marketed as a cheap but powerful smartphone for teenagers: one that would let them browse the net, send photographs and e-mail, and use social networks.

It wasn’t entirely Microsoft’s fault that the Kin model didn’t work out. The company was partly undermined by their exclusive phone distributor, Verizon, which saddled the $50 phone with an $30 data plan, instead of the $10 usually offered to the target market. But mostly the Kin failed because of internal Microsoft office politics.

Allard’s pet project attracted the ire of Microsoft’s established Windows Mobile group. Senior vice-president Andy Lees, who ran the existing phone unit, eventually gained control of the Danger team and Project Pink in an executive coup. Allard was sidelined, and the project itself was starved of support, only shipping because Microsoft had an existing contractual agreement with Verizon.

Companies the size of Microsoft can afford these occasional stillborn projects, and can recover from them. Who now remembers Apple’s own abortive phone co-venture, the Motorola Rockr Apple iTunes phone?

Despite being supported and launched by Steve Jobs and Apple, the Rokr was voted one of the worst gadgets of 2005, and it too was abandoned less than a year after its original launch.

But the failure of the Kin is more than just a one-off. Microsoft’s next generation tablet project, Courier, was also killed in April, this time without even making it to market. Courier was Allard’s baby too: the rumours of the cancellation were quickly followed by Allard’s public resignation from day-to-day involvement with the company, though he remains an adviser to chief executive Steve Balmer.

In some ways, the very fact that Microsoft still has enough of its old ruthlessness to kill such high-profile products is the one indication that there’s life in the company yet – even if that pitiless savagery is currently aimed at itself.

One would hope that the night of the long knives for these projects is an indication that Microsoft’s top executives know that there’s something wrong, and, in true Microsoft fashion, are now culling the weak in an attempt to concentrate on the truly promising projects.

Kin deserved to die; no one really saw much of Courier apart from a few flashy demonstrations. It may be that Microsoft saw the iPad and decided to retool its original tablet plans to address this new threat. Or, these personnel shifts and last-minute abandonments might simply be more of what made the Kin so bad in the first place: petty internal politics, a growing lack of direction, and a company that is stumbling over its own size to deliver anything outside of its core competencies that can grab headlines and please customers.

Either way, it can’t be good for internal morale in Microsoft’s entertainment and mobile sections. As one insider said of the Kin: “As an employee, I am embarrassed. As a shareholder, I am pissed.”

I see no strong indication of these troubles at the core of Microsoft’s world, in its operating system and business software planning. But the company cannot retreat back to those safe fortresses and still be a power in the land. If the company loses that edge, it deserves the fate it enforced on so many of its long-departed rivals.