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Summary:

Taking charge of your own retail distribution is a questionable move even in the best of times, but it looks like Microsoft is bent on opening up another battleground between themselves and Apple, and that’s where they want to do it. It’s a gutsy move on […]

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Taking charge of your own retail distribution is a questionable move even in the best of times, but it looks like Microsoft is bent on opening up another battleground between themselves and Apple, and that’s where they want to do it.

It’s a gutsy move on Microsoft’s part, and it’s hard not to offer up some begrudging respect for a company willing to lay it all on the line like this, considering the economic conditions. There’s no timeline for the actual opening of these stores, so they may just be preparing well in advance, and waiting to weather the storm.

The news of the plan to open retail stores comes via an announcement of Microsoft’s decision to hire 7-year retail vet David Porter as Corporate Vice President of Retail Stores, a move which pretty bluntly suggests that they’re planning on having some for him to oversee. And, in case there was still any question about it, they actually mention said plans in their official press release on the subject.

The big question from Apple’s perspective is: Does Microsoft retail pose a threat? I believe the answer is no, for a number of reasons. First, I think that any market share grab that occurs as a result of the new stores won’t come from Apple’s customer base, but rather from their own existing customers who would otherwise buy at Best Buy or some other large, multibrand electronic retailer.

Second, Microsoft still depends on third-party hardware manufacturers, at least in regards to their primary PC products. Apple sells third-party gear, but its own computers and software are the focus of the store. That means that Microsoft stores won’t carry as strong or cohesive a brand image as their rival, which has been a big part of Apple’s success over the years. Microsoft does have the advantage of having the Xbox to sell, and Microsoft-branded peripherals, but with a hodgepodge of PCs, style and reliability come into question.

Finally, Apple has the advantage of experience on their side. They’ve been in the retail game for eight years, and they seem to be fairly good at what they do. They won’t take Microsoft nosing in on their territory lightly, and you can bet they’re already formulating a response strategy as we speak. Yes, Redmond is bringing on experienced staff, but that doesn’t beat the experience of an entire company.

All of this isn’t to say that Microsoft can’t be successful in their own right. They have the advantage of being able to stock and sell netbooks, for example, which is huge, growing market that Apple doesn’t have a presence in. But if they think they’re going to deliver a knock-out blow to their competitors, they’re sorely mistaken.

  1. I’m interested to see what they’re planning on doing. I just don’t see people going to a retail store to buy a copy of Windows 7 Large Suburban Home Edition™ and a Microsoft Mouse. Without a cohesive or compelling hardware lineup, this seems like a strange move.

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  2. I find it interesting that their “experienced man” in charge of opening these retail stores is a former Walmart VP and general merchandise manager of entertainment. I don’t know about you, but the Walmart shopping experience is not something I’d be attempting to emulate. We’ve got the big TVs on the back wall… couple rows of music, couple of DVDs, slap some games on the far side… there’s nothing that differentiates that experience from others in the industry. I don’t know, I just don’t see where they’re coming from here…

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  3. @Joey: While Walmart may not be an innovative experience (anymore), it is fantastically successful, so I’d imagine that if they’re able to replicate that success in any way, that would be a good thing for them.

    The last line of this post seems odd: won’t be a knock-out blow to their competition? The tone of the article has Microsoft as the upstart to Apple’s market dominance, but the usage stats say something different, don’t they?

    Microsoft opening their own stores makes sense if they’re trying (as they seem to be) to change the public perception of their brand. Why rely on a Best Buy employee who might not realize that problems that existed briefly in Vista have been fixed long ago, when they can have their own employees who know about their products, and who can speak authoritatively on the best combination of hardware and software to make their new Windows experience the best it can be?

    Does Apple now have a monopoly on wanting customers to see them as a nice company who sells good products?

    I mean, I love Apple, I’m typing on a MacBook Pro and listening to a podcast on my iPhone, but just because the market leader makes an obvious move, one which the upstart themselves did, doesn’t mean that the move is bad; if it was, why would Apple do it?

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  4. They could put a McDonald’s inside to attract customers!

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  5. That’s a pretty dumb move. What advantage does a Microsoft store have to offer the customer? Nothing. Their crap can be bought at Staples, Best Buy, and the like. And it’s not like the people in the Microsoft store are going to be any more educated than the $5 an hour teenagers working at Best Buy. Microsoft, quit while you’re ahead and don’t bother us with the stores.

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  6. @ryemac3 Why would you assume that they wouldn’t train their employees better than a Best Buy?

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  7. Brian Hogg is correct. They will have to train their staff well so they can deal with all those nasty viruses and registry problem their customers come in with.

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  8. [...] up, Microsoft is joining the high street retail fray. Fresh from Wal Mart, David Porter is now onboard as Microsoft’s Corporate Vice President of [...]

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  9. Brian is right. And Apple should be very concerned that the undisputed heavyweight in personal computing is taking an interest in retail outlets, while Apple as has moved some of their sales to Best Buy outlets. They are both experimenting outside their long-standing distribution channels.

    Microsoft might be looking to control their brand better through a corporate retail chain. I’d expect the third party hardware selection to be tightly controlled and top of the line, which can be pretty impressive. Microsoft has a serious brand problem on their hands, and a controlled environment could be just what they need.

    Don’t count them out. Microsoft is a huge company with enormous resources. Inside there are definitely some talented and forward thinking individuals just waiting to make it happen. If they get their act together Microsoft could be quite successful.

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  10. Best Buy! Indeed. I was wandering through the computer area of our local BB a few days ago and overheard an older couple ask the sales guy why all those laptops had so many stickers on the keyboards (you know, the MS sticker, the Intel sticker, the Windows sticker, the Symantec sticker, the whatever sticker). the sales guy said, without missing a beat, that they were there for the customer’s protection to provide confidence that the parts and software were “genuine,” as if there were bogus operating systems around. The lady asked why those nice white laptops across the aisle (the Apple area) didn’t have them – were the inferior or something? The sales guy said they were Macintoshes and they didn’t put labels on their computers. The lady asked for a demo of the Mac because it looked so clean.

    The lesson for MS (and the PC vendors) is to clean up the keyboards and get rid of the branding labels!

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