Microsoft pulls plug on Kin phones

Microsoft has pulled the plug on a new generation of smartphones less than three months after unveiling the devices that were part of its efforts to catch-up with Apple and Google in the fast-growing mobile market.

Microsoft said it had cancelled plans to sell its “Kin” phones in Europe, where it was due to go on sale in autumn this year, and that the internal team working on the project would be combined with the group working on the forthcoming Windows Phone 7 software.

“We will continue to work with Verizon in the US to sell current Kin phones,” Microsoft said in a statement.

The move underscores the challenges facing Microsoft as it strives to adapt to consumers’ growing taste for handheld Internet-connected gadgets like smartphones.

In April, Microsoft said it was shelving an internal project to develop a tablet PC similar to Apple’s iPad.

Last month, the company reorganised its mobile phone and video game division, announcing that longtime Microsoft executive Robbie Bach would retire and that the senior vice presidents in charge of phones and games would report directly to chief executive Steve Ballmer.

“Ballmer is looking at the mobile business, seeing what’s making money, what makes sense to do going forward,” said Matt Rosoff, an analyst with Directions on Microsoft.

The Kin phones represented Microsoft’s first foray into designing its own handsets. The two Kin models featured built-in social networking and Microsoft’s Zune digital music player.

But Rosoff said the phones lacked certain key smartphone functions, such as the ability to install software applications.

The Kin was also based on a special Microsoft software called Windows Phone OS, even as Microsoft prepared to release the new Windows Phone 7 mobile operating system. Smartphones running Windows Phone 7 are expected to be on sale by the end of the year.

“Windows Phone 7 is the real mobile strategy,” said Rosoff. “The fact that it (the Kin) was ever released in the first place was a mistake. When they went with Phone 7, they should have quietly killed this project.”