Thursday, May 6, 2010

Who's Afraid of the Microsoft Kin? The Carriers

The Microsoft Kin phones have been smothered in their beds. Poor kids. Verizon today launched Microsoft's two new messaging phones to a resounding chorus of negative reviews.

I complained about lack of apps and games on our reviews of the Kin One and Kin Two, but I was actually pretty kind; if you click over to Engadget or Phonescoop, you see phrases like "I haven't been this disappointed in a phone in a long time."

But here's the thing: the Kins are misbegotten, crippled creatures compared to pretty much every smartphone on the market. They've been priced as smartphones, with smartphone data plans, and they're being sold as smartphones, so the comparisons are fair.

But the Kins are actually interesting when compared to texting phones, otherwise known as "QMDs" or quick-messaging devices. Texting phones like the LG EnV series have Web browsers out of the 1990s, awful e-mail programs, and no social-networking skills at all. Because they cost $20 less per month than smartphones, they're selling fast to kids who want to connect with their friends, but whose parents don't want to have a stroke over their monthly cell-phone bills.

The Kin could have had more appeal had Verizon given it a cheaper data plan. But they didn't because Verizon is actually afraid of these little guys. They're afraid that Kin users, with their full Internet Explorer-based browsers and automatic photo uploads, will consume too much Internet. And rather than encouraging mobile Web use by making it more affordable, carriers are steadily raising rates.

In January, Verizon slapped a $9.99 mandatory data plan on many of their texting phones, even for people who hardly use the Web at all. Verizon also tries to upsell those users onto $30, smartphone-esque data plans if they do choose to surf often. Verizon did lower their smartphone data plan from $45 to $30 about two years ago, but back then the vast majority of their phones didn't require a data plan at all.

Verizon's not alone here. Long ago, T-Mobile had a "T-Zones" plan for mobile phones which cost $2.99/month. Then they raised it to $4.99. Now their minimum phone data plan costs $9.99. The T-Mobile Sidekick data plan used to be $19.99. Now it's $30.

On AT&T, you may be familiar with their iPhone plan. Once it was $20; now it's $30. For texting phones, AT&T now requires you to buy at least $20 worth of texting and data per month. Their chief executive, Ralph de la Vega, has been hinting for a while at the possibility of even more expensive, usage-based monthly data fees. Only Sprint has held the line with a $15 data plan for most of their phones.

And that's not mentioning the many additional monthly charges that carriers tack on. Want to use an e-mail client on a Verizon phone? That'll be $5, thanks. How about GPS? $10/month, please.

Not just greed - it's fear

I don't think the carriers are solely greedy. I think they're scared. Carriers are raising prices because they're actually terrified of mobile phone owners using the Internet. They fear they don't have enough Internet to go around. At conference after conference this year, I keep hearing about mobile Web scarcity – how there's not enough spectrum, not enough capacity, not enough buildout. After all, we've seen what "excessive" demand can do to one carrier, watching AT&T's struggles with all of their iPhone owners in New York and San Francisco.

New 4G networks may take some of the pressure off of 3G next year, but carriers need to look at optimizing their data flows, too. Opera and RIM, most notably, are doing a lot of work to provide full mobile experiences using less data. AT&T has been loading Opera Mini onto many of their texting phones recently, and that's a win for everyone, especially iPhone users – it provides a much better Web experience than previous browsers did, and it transfers up to 90 percent less data than a truly full browser. A version of Opera Mini exists for Verizon's BREW platform, but so far Verizon has ignored it.

RIM, meanwhile, has been ringing the bell for server-side optimization with smartphones - but they need to explain how that's going to save consumers not just time, but money. If RIM's browsers and e-mail clients deliver less data than competing smartphones, maybe carriers should be giving them a break on the data plans.

So take a moment to pity the Microsoft Kin. As feature phones, they flew a little too close to the sun with their browser and Spot and Studio, and they got burned by the fearful, jealous gods who ultimately rule the mobile universe.

If you're still interested in the Kin phones, they go on sale on May 6, online, at Verizon's site. They'll appear in stores on the 13th. The Kin One costs $149, minus a $100 mail-in rebate; the Kin Two costs $199 minus a $100 mail-in rebate.


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