Despite an embarrassing flop that saw it pull its KIN line of phones from the market last month amid dismal sales, Microsoft isn't giving up on smartphones, CEO Steve Ballmer said.
Along with slate PCs, phones are "a terribly important area for us," said Ballmer, who spoke Monday at Microsoft's Worldwide Partner Conference in Washington, D.C. "It's certainly an area where, how do I say it, we feel all of the energy and vigor and push that we have ever felt to innovate, to drive hard, to compete," Ballmer said.
Microsoft, which lags well behind Research In Motion and Apple in the U.S. smartphone market, hoped to make a splash earlier this year with the launch of its KIN phones.
KIN's main interface, the KIN Loop, offered real-time feeds and status updates from Facebook, Twitter, Microsoft's own Wonder Wall, and other Web 2.0 sites. To share an item with a group of friends, users could drag it into a small circle called the KIN Spot. Graphically, the item then disappeared down the circle and was instantly shared.
While slick in theory, customers were cool to a phone that skipped more basic features in favor of a social networking-centric design. Users also balked at the pricey, and mandatory, Verizon service plan. Amazon sales data recently showed KIN Two ranked 1,575 in the retailer's cell phone category, while the less powerful KIN One ranked 7,094. In other words, both phones turned out to be massive sales flops.
Ballmer did not mention the KIN debacle in his WPC keynote—but said he's confident the debut of Windows Phone 7 later this year will help reverse Microsoft's fortunes in the phone market. Unlike KIN, Windows Phone 7 is geared toward users in Microsoft's sweet spot—the enterprise.
"We will give you a set of Windows-based devices that people will be proud to carry at home, and which will also support the kind of scenarios that enterprise IT is trying to make happen in the phone form factor," Ballmer said.
Microsoft has said developers who design applications or games for Windows Phone 7 will be able to leverage built-in support for cameras, microphones, location-based services, hardware-aided video, IT-class security, and more. Windows Phone 7 is expected to ship in time for the 2010 holiday season, or earlier.