UPDATE 3-Microsoft launches Kin phones for youth market
* New phones called Kin One, Kin Two
* Aimed at young, social networking market
* Not seen as competitors to iPhone, Nexus One (Adds byline; analyst, executive quotes)
By Bill Rigby
SAN FRANCISCO, April 12 (Reuters) - Microsoft Corp (MSFT.O) launched two new phones aimed at young people on Monday, marking a fresh assault on the low end of the growing smartphone market, where BlackBerry maker Research in Motion Ltd RIM.TO and Apple Inc (AAPL.O) now dominate.
The software company's first foray into designing its own phones comes six months before it rolls out its new Windows software for phones made by handset makers HTC Corp (2498.TW), Samsung Electronics Co Ltd (005930.KS) and others, which should be a more direct challenge to Apple's iPhone and Google Inc's (GOOG.O) Android phones.
"Kin is an interesting attempt to target the 15 to 25 market," said Ross Rubin, consumer electronics and wireless industry analyst at market research firm NPD Group.
Success will depend heavily on the pricing of data plans, said Rubin, which is not expected for a few more weeks. Microsoft did not say how much the phones would sell for.
"But even if the device does not turn out to be successful, Microsoft is introducing some concepts that might be useful," said Rubin.
The Kin One and Kin Two, as they are being branded, are made by Japan's Sharp Corp (6753.T) and will be sold by Verizon Wireless, a joint venture between Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).
The new phones -- available in the United States in May and Europe in the autumn -- focus on combining feeds from Facebook, MySpace and Twitter onto the homescreen, and allow users to set up networks of friends to share photos, weblinks and so on.
Both of the new Kin phones have a touch screen, slide-out keyboard and camera. Kin One is smaller, designed to be used with only one hand, while Kin Two has a larger screen and keyboard, more memory and can record high-definition video.
They incorporate Microsoft's Zune digital music player and FM radio. Almost everything on the phone is stored by Microsoft in remote servers and accessible via the Internet from any Web browser via an online application called Kin Studio.
Kin automatically backs up text messages, call history, photos, videos and contacts, in an attempt to soothe fears of data loss. Last October, users of Microsoft's Sidekick phones temporarily lost data due to a server failure.
Microsoft broke with tradition by working with only one manufacturer on the phone, but stressed that the Kin is consistent with its broader Windows Phone 7 strategy, which will put a new generation of smartphones on the market later this year.
"This isn't a Microsoft product," said Robbie Bach, head of Microsoft's entertainment and devices unit, at the Kin launch event in San Francisco. "Sharp is not just the manufacturer, they sell the phones to Vodafone, not Microsoft. This is a very traditional model, it's just that we were more involved in the design and the hardware with Sharp."
Microsoft has traditionally licensed its Windows phone software to a wide range of handset makers, allowing them to control the user experience.
Launching Windows Phone 7 in February, Microsoft admitted that approach had led to some loss of consistency across models, which suffered in comparison with Apple's minutely designed iPhone.
Microsoft plans to work more closely with handset makers, but Bach repeated that it still had no plans to manufacture its own phones. (Additional reporting by Gabriel Madway; editing by Phil Berlowitz, Lisa Von Ahn, Andre Grenon and Carol Bishopric)
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