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Money-spinner Microsoft loses cool factor

July 5: Microsoft’s engineers and executives spent two years creating a new line of smartphones with playful names that sounded like creatures straight out of The Cat in the Hat” — Kin One and Kin Two.

Stylish designs, an emphasis on flashy social-networking features and an all-out marketing blitz were meant to prove that Microsoft could build the right product at the right time for the finickiest customers — gossiping youngsters with gadget skills.

But last week, less than two months after the Kins arrived in stores, Microsoft said it would kill the products.

“That’s a record-breaking quick end to a product, as far as I am concerned,” said Michael Cronan, a designer who helped drive the branding of products like Kindle for Amazon and TiVo. “It did seem like a big mistake.”

The Kins’ flop adds to a long list of products — from watches to music players — that have plagued Microsoft’s consumer division, while its business group has suffered as well through less-than-successful offerings like Windows Vista and Windows for tablet computers.

In particular, the Kin debacle is a reflection of Microsoft’s struggle to deliver what the younger generation of technology-obsessed consumers wants. From hand-held products to business software, Microsoft seems behind the times.

Part of its problem may be that its acumen to intrigue and attract software developers is also waning, which threatens its ability to steer markets over the long term. When it comes to electronic devices, people writing software have turned their attention to platforms from Apple and Google.

Young technology companies today rely on free, open-source business software rather than Microsoft’s products. So, young students, soon to be looking for jobs, have embraced open-source software as well.

“Microsoft is totally off the radar of the cool, hip, cutting-edge software developers,” said Tim ’Reilly, who publishes a popular line of software development guides. “And they are largely out of the consciousness of your average developer.”

The Xbox 360 gaming console and its complementary online services have been a rare hit with consumers. Still, being hip matters only so much for Microsoft, whose profits remain the envy of the business world. Microsoft’s software like Windows and Office remain the dominant standard around the world.

“When you look at the overall numbers and who buys and uses our products, I think our track record is pretty good with all demographics,” said Frank X. Shaw, Microsoft’s head of communications.

In May, Microsoft announced a shake-up of its consumer and entertainment division. Steven A. Ballmer, the company’s chief executive, now has the heads of the main consumer and entertainment-oriented products reporting directly to him.

While Ballmer has been praised for increasing Microsoft’s main, old-line businesses, he has come under increasing fire for failing to read changing trends in the market and capitalise on them.

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