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.