Microsoft Death Watch – Damage To The Ecosystem

Last nights article, Microsoft Death March – Confirmation From Business Insider was picked up by Dr. Roy over at Techrights. His main interest was in the part about Windows Phone 7, and he mentioned the earlier KIN phone, with the comment that some people are selling them on EBay.

So I got curious. I can’t do what I wanted to do this morning until YouTube finishes processing the video I uploaded last night, so I had a bit of time on my hands. I went to look, and sure enough, there were KIN phones for sale. But what I hadn’t thought about was the accessories. Let’s see, we have:

Vinyl Skins

Zebra Faceplate

In Car Mounting System

Blue Plaid Faceplate

Pink Hard Rubber Case

Leather Belt Pouch for the KIN 2

Leather Case for the KIN 1

Body Glove Case

Skull Protector Case Cover

Vertical Pleather Case for the KIN 2

There were a variety of other things for sale too, but USB cables aren’t specific to a single device, unless you are Apple. It’s the same with phone chargers, and phone batteries. The items above though are useless without a phone, and a lot of effort went into developing them, and of course there’s the cost of making inventory, the cost of shipping, etc. Yes, the faceplate for your phone probably sells for $15.00, which sounds inexpensive, but remember that to get the cost that low, the faceplate manufacturer probably had to set up a production run of 50,000 units or more.

And here we have John Gruber saying that an insider told him that Microsoft only managed to sell 503 KIN phones. Business Insider also covered the sales numbers, with a lot of speculation on how many really sold, and coming up with numbers from 500 to 10,000, but suspecting that it was probably less than 1000. Microsoft of course, isn’t talking.

The exact number doesn’t matter. What matters is that the product didn’t sell well, and the phone Accessory Ecosystem got burned badly.

What lesson did the Accessory Ecosystem learn?

Simple. It’s more profitable to build accessories for IPhones and other Apple products than it is to build them for Microsoft phones.

Which makes me wonder how well the new Windows 7 phones are being supported with accessories? Not very well. A quick check on the website of a local Big Box retailer gives me a strong impression that the only accessories available for Windows 7 Phones are those that fit other phones (SD Cards, Bluetooth Headsets).

So what we have is a feedback loop. Since the last phone didn’t sell well, and the accessory makers got burned, they aren’t supporting the current phones, which means that sales of the current phones will suffer, because you can’t buy the accessories that you want.

This should be interesting.

Regards

Wayne Borean

Thursday November 11, 2010

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