Why Microsoft Is Trying to Sell a (Smart) DumbphoneS

Dumbphones are dead, right? So why—at the time of the great Windows Phone 7 resurrection—is Microsoft pushing a totally separate phone platform that doesn't even run apps? The answer is borderline insane, but just might work.

When I first saw the two-pronged strategy, with Windows Phone 7 on one side, and the Kin phones (formerly known as Project Pink) on the other, I was like, "Oh great, another strategic bumble by Microsoft." I thought that at best Kin represented a lack of confidence in the new Windows Phone, a hedge of the bet. At worst, I thought, Kin and WP7 were both projects developed by teams with enough clout to get products released, even if they were, in effect, competing with each other in the face of massive competition from Apple and Google.

What the Hell, Microsoft?

My particular concerns should be obvious to anyone following along:

• If Kin is aimed at people ages 16 to 30, and WP7 is for people 25 and up, isn't there a segment of 25-to-30-year-olds who are just totally confused?

• If WP7 isn't really for people under 25, why does it have Xbox mobile gaming capability? And why aren't there any Xbox features in the Kin phones?

• If these two phone systems are "complementary," as Microsoft's marketing material suggests, how come there's no migration path from one platform to the other?

• And finally, why isn't Microsoft trying to copy Apple's monolithic iPhone strategy, where juniors get an iPod Touch, that alluring gateway to the Land of 180,000 Apps?

I brought these concerns to Microsoft—specifically to Aaron Woodman, director of the product management team for Windows Phone 7—and to my surprise, he was able to answer them reasonably well, with a minimum of spinny spin spin.

Why Microsoft Is Trying to Sell a (Smart) DumbphoneS

You Are All Snowflakes

Essentially, Microsoft is consciously aiming two totally separate products at two totally separate buyers, ones who aren't supposed to cross paths. And if they do meet up, it will be a few years down the road, when the two phones might have more in common than they do now.

The reason there isn't really a lot of confusion in that 5-year span of late-twenties phone shoppers is that this is less demographic, more "psychographic." It's a gross marketing term, so let's just go with examples: Think of that one person you know who makes more money than your parents, but is only 27. That person is distinct from that other guy you know who is the same age, but has been unemployed more than he's been employed, and knows more bartenders than business contacts. Woodman stretches the boundary further with the example of a guy in his 40s who is "fresh out of a divorce, in that reevaluating phase," who may well feel that a cheaper, simpler always-connected social phone like Kin will provide the best way to reboot his life. (Maybe Tiger should get one.)

Why Microsoft Is Trying to Sell a (Smart) DumbphoneS

What About Xbox?

Yes, Woodman acknowledges that Xbox is something that interests people under 25, but they intend to launch a serious mobile gaming platform this year with Windows Phone 7. This means that they need to keep hardware specs uniform and high-performing, so as not to piss off game developers. Kin's Tegra chipset may provide an extraordinarily fluid interface, but it's not 3D-gamer ready, at least not at the level of the handsets destined for WP7.

He did acknowledge that Xbox definitely appeals to many who should be shopping for Kin, saying vaguely, "We see that value as an opportunity." Does it mean that there might be casual games or other Xbox Live tie-ins, even if full 3D gaming isn't doable? Woodman said he couldn't comment on any future products. I am still holding out for a Zune HD2 model, which would be phone-less, but have the graphics muscle to run WP7 games.

As for the people who want to switch from one to the other, Woodman argued that there are experiences that are shared between the two phones, most notably Zune Pass, the beloved music subscription service. All the phones are logged as part of Microsoft's Live ID, which securely stores billing and other personal data online so that your phone is a part of the internet, and not an isolated island.

I told Woodman I wanted to see Xbox on the Kin, and that I wanted the Kin's Studio—a website that can show you everything from incoming text messages to photos you took a year ago, syncing in realtime with your phone—appearing as an option for Windows Phone 7 users. He wouldn't confirm anything, but did say that a few years from now, we shouldn't be surprised to see a point where the two platforms are more interrelated. That may sound like a typical Microsoft "mañana, mañana" promise, but given the rate at which Microsoft cooked up both Windows Phone 7 and Kin, adjustments to either roadmap probably wouldn't be that difficult.

Why Microsoft Is Trying to Sell a (Smart) DumbphoneS

That Damn iPhone

So what about the Apple strategy? Isn't the correct approach getting the kids excited by the apps on the iPod Touch, so that, as soon as they can, they connive their parents into buying an iPhone? I checked in on my 16-year-old cousin Katie—on Facebook, duh!—and she demonstrated how this theory can backfire. The following is an uncorrected transcript of her comment to me, no doubt typed in less time than it takes for the late bell to ring:

i have an itouch and as soon as i got it my first thought was i would reallyyy want an iphone because it has all the apps and everything but then when i used it more and more i thought that well if i already have a itouch then whats the point of having both the iphone and the itouch? typing on the iphone can also get really annoying because i can text really fast on a keyboard without even looking and with the iphone/itouch i have to look and really concentrate on what i'm typing because it messes up so easily and the touch screen is really sensitive.

She's interested in the Kin, at least for the moment, because it has touchscreen and a hardware keyboard. And that iPod Touch actually gives her a way out of the iPhone trap.

Microsoft really believes in this audience, and there's reason to think that—despite the company embarking on a two-front war at a time when they're having trouble winning any mobile battles—the decision to energetically pursue the dumbphone business might not be stupid. Risky but not stupid.

Why Microsoft Is Trying to Sell a (Smart) DumbphoneS

The Car Analogy, or It's a Big Big World

One analogy I read in the Kin marketing material initially made me want to hurl:

Honda manufactures and markets the Honda CRV and Honda Element, both Midsize SUVs, but with distinct styles, features and value propositions geared to the urban driver versus the outdoor enthusiast driver. This gives Honda the ability to address multiple segments simultaneously and a marketable advantage.

But I have come to realize that, in a world of marketing people comparing their products to cars, here was the one time when the analogy was apt.

Both industries are so huge that targeted niche models can be considered successes. Here's what I mean: Last year, something like 200 million smartphones were sold. Lots. But that's only one sixth of the total phone market of 1.2 billion phones, as reported by Gartner.

No matter how fast the iPhone market is growing, and how badly Microsoft wants to get back into that business, there's other action to be had. And if Kin's cost is kept low—both the handset price and the monthly data fees—then going after Samsung and LG and Nokia, hoping to draw people away from their cheap generic phones, could be easier than fighting Apple and Google (and BlackBerry and Palm). If so, then there's success to be had, too.

If a billion dumbphones are going to be sold this year, Microsoft figured they'd make the smartest ones and see who buys them. [Full Coverage of Microsoft Kin]