This is not unexpected, the Kin devices are just a failure, and microsoft is definitely doing the correct thing by killing the Kin One and Kin Two devices, and they confirmed with Cnet with the following statment:

"We have made the decision to focus exclusively on Windows Phone 7 and we will not ship KIN in Europe this fall as planned," the company said. "Additionally, we are integrating our KIN team with the Windows Phone 7 team, incorporating valuable ideas and technologies from KIN into future Windows Phone releases. We will continue to work with Verizon in the U.S. to sell current KIN phones."

Neither Verizon nor Microsoft would say how many devices were sold, but a source told CNET that the number of Kins sold thus far is more than 1,000 but south of 10,000--significantly below expectations.

Microsoft will now focus on Windows Phone 7.  Hopefully we will get to see something cool coming out from Windows Phone 7 in the near future.

source: cnet