• by Mark Walsh  @markfwal, May 5, 2010

When Microsoft announced its social media-focused Kin phones last month, a big question left unanswered was how it would price the devices aimed at younger mobile users. If priced out of range of their intended audience, Kin devices might not get traction no matter how much positive buzz they've generated so far from early reviews or online chatter.

So with Microsoft and wireless partner Verizon Wireless today announcing pricing for the Kin One at $49.99 and the more high-powered Kin Two at $99.99, both after a $100 rebate and a two-year contract, it looks like they got it right for the market. "The device pricing is perfect at $49 and $99 and is highly competitive with both touchscreen messaging phones and entry level smartphones," said Avi Greengart, research director for consumer devices at Current Analysis.

The phones go on sale tomorrow online and hit stores May 13.

The problem comes with the service plan. Users will have to sign up for an unlimited data contract for $29.99 a month on top of the $39.99 calling plan. The $30 monthly data plan, which doesn't include text messaging (and it's aimed at kids?), prices the Kin phones out of reach for most of their target audience, according to Greengart.

Verizon also isn't offering any pay-as-you-go plan with the Kin phones that might compete with youth-geared prepaid devices from the likes of Boost Mobile and Virgin Mobile USA.

"That's a shame, because I just got back from doing an informal focus group with a bunch of teenagers, and they really liked the Kin," he said. Among key features is its Loop homescreen, bringing together feeds from both Microsoft properties and outside social network such as Facebook, Twitter and MySpace. Another feature called Spot lets users drag videos, photos and other media to an specific icon to streamline content-sharing.

Greengart called many of Kin's elements "conceptually brilliant" but poorly implemented. "Those who can afford a smartphone data plan will be better off with an actual smartphone," he said. That doesn't bode well for the first phase of Microsoft's mobile comeback, attacking the market from the bottom up via the Kin devices. The second, more crucial phase, will come when it rolls out its line of smartphones powered by the new Windows Phone 7 operating system at the end of the year.

Handsets running the company's existing Windows Mobile OS dropped to 7.9% of the worldwide smartphone market in the fourth quarter, down from 12.5% a year ago. The Kin phones don't run Windows Phone 7, so they won't have any direct bearing on whether Microsoft will bounce back in the smartphone market. But they may not provide the strong opening act Microsoft was looking for leading up to the debut of its new high-end devices later this year.