"Failing" has become such a well-liked buzz word in the last couple years, unless you're a company people don't like, in which case it is awful.
The real failure here is having gone and built this whole shebang without securing the pricing side first.
With the always-connected social features they want on the phone, there is really no alternative plan pricing.
Their failure was in capturing market, or more precisely, the lack thereof. There was simply no market for a half-smartphone like the kin, that wasn't really good at being a simple "dumbphone", and not even as "smart" as a last generation iphone which costs about the same.
With the iPhone 3GS going for $99, and a handy selection of decent featurephones available for free depending on carrier sales, anyone with half a brain would know there is no market for something like the kin. At least not now of all times.
Always-connected doesn't necessarily mean huge amounts of bandwidth. They could have built this thing as a social media device that was doing simple messaging and heavily restricted / optimized features for photo & video. I think there would be a space in the market for such a thing for teens, but MS clearly badly missed it. And if they have pissed off their carrier partners in the process then it is even worse because they desperately need their support if WP7 is going to be a success.
They launched this too early; wait til voice/data prices drop even further to reach this demo. Though to me it's still not an iPhone or an Android and all the cool kids will have one of those.
From the limited samples we've seen, Windows Phone 7 seemed like a fairly competent response to the iPhone and Android. Whether MS can sell mobile os licenses in an age where Android is available to OEMs for free is an open question, but they seemed to be intensely focused on making it work.
And then Kin was announced seemingly out of nowhere. Suddenly MS had two, nonrelated mobile strategies. That Kin directly competed with the same OEMs that are the customers of the other mobile OS made the move seem even stranger.
This same story played out in the online music store business. Microsoft released the Zune and Zune Store in direct competition with their vendor-agnostic solution. The two platforms were mishandled to the point where the DRM on the mp3 files were incompatible. By splitting the focus on the company, they couldn't articulate a clear strategy and ended up ceding the market to Apple.
An op-ed from a former MS executive described the company as a collection of little kingdoms, constantly battling among each other, to the point where the only impression is one of chaos. Their mobile strategy is turning into the perfect example.
Right. Don't compete in the smartphone space with something like Kin. Make something cheap, without a monthly charge, but which shows iAd style ads. Make it something that doesn't make calls, but which can work with a kid's free featurephone to give a lot of the utility of a smartphone with no or negligible monthly charge. Make the money off the ads. Share the ads with the carriers.
I think the consensus is to fail small and fail often.
Actually, scratch that, it should be: prototype often, so to keep failures small and easy to rebound from.
Regardless, you do not want to spend countless hours and dollars bringing a product to market only to realize it was a failure 3 weeks later. That's a rookie "big company with lots of money" mistake that Microsoft should have outgrown decades ago.
To quote Jason Fried on failure: "You might know what won’t work, but you still don’t know what will work. That’s not much of a lesson."
After all their success, Microsoft should know better.
The Kin's short history is a long series of WTF moments from the market without any echo from Microsoft.