The Kin phones were never designed to catch up with Apple or Google - and it was never positioned in that market, so that part of the Reuters article is total BS as usual.
It was designed by/for the Sidekick market, and those kids have already moved on to other devices. The Kin was not a bad phone, but it should have come with a $10 data plan and be available at the local Walmart for $49.99. They had it overpriced, on regular data plans, and that will always be a sure way to kill any product.
Windows 7 is the Microsoft answer to the iPhone and Android devices - and that has the potential to actually make a difference. Kin was a bad idea, 2 years too late, on bad plans.