T-Mobile says farewell to Microsoft DangerMarch 1, 2011: 11:07 AM ET
The cell company is rebooting Sidekick phones on Google's Android OS, leaving Microsoft's $500 million purchase of Danger looking wasted.
If you needed more proof that Microsoft's $500 million acquisition of mobile software maker Danger was a flop, here it is: T-Mobile just announced that service to its once-popular Sidekick devices, powered by Danger, will be discontinued on May 31.
What does that mean? For Sidekick users, it means your text-centric smartphone will soon turn into a glorified paperweight. For Microsoft (MSFT), it's yet another setback to an already challenged mobile strategy.
Microsoft says most of the team working on Danger has already been absorbed in to the Windows Phone 7 group (Microsoft's home-brewed mobile operating system). But the Redmond-based software giant had much bigger plans for Danger back in 2008, when it announced it was buying the small Palo Alto, Calif. company. The plan was to tap into the Sidekick-maker's "deep understanding of consumers" and its "young and enthusiastic, internet-savvy and socially inclined" customer base (according to a company release from 2008). Obviously, that never quite happened.
Instead, the integration led to the Kin, a social-networking device and one of Microsoft's most high-profile flops. The short-lived smartphone launched in May 2010 and was killed off just two months later due to poor sales.
Now, T-Mobile has decided to "transition" Sidekick customers off Danger's software and service. The company says it will provide an online tool that will help users easily export their contacts, photos and other data to a new phone.
The full-QWERTY Sidekick was one of the first smartphones when it made its debut in 2002. It instantly became the darling of celebrities and rap videos. But its appeal has fizzled in recent years, with the advent of the iPhone and other devices.
"It's natural for older products to be replaced with newer ones as technology evolves," T-Mobile spokesperson Tom Harlin told Fortune.
So what new technology is T-Mobile turning to? You guessed it, Google's (GOOG) Android. The mobile operator has already announced plans to launch a 4G-enabled, Android-running Sidekick this spring, before the current stock of Danger-powered smartphones are shut down. (Fittingly, original Danger co-founder Andy Rubin is the brains behind Android and currently oversees development of the fast-growing mobile operating system at Google).
Lucky for Microsoft, it recently inked a deal with Finnish phonemaker Nokia (NOK), which agreed to adopt Windows Phone 7 as the new operating system for its future smartphones. Although Windows Phone 7 has yet to gain significant traction, it's gotten good reviews. And while Nokia is weak in the United States, it remains the number one phonemaker abroad. Nokia's Windows Phone 7 devices won't be out for a while, so it's too early to tell how successful the recently-announced partnership will be. But here's betting that NokSoft has a brighter future than Microsoft's Danger acquisition. And the Kin.