Microsoft Continues Its Retail Sprawl

Just another one of the ways that Microsoft (NASDAQ: MSFT  ) has been expressing its Apple (NASDAQ: AAPL  ) envy in recent years is the build-out of its Microsoft Store retail footprint. The first one opened back in October 2009 and immediately invoked comparisons to Apple's own storefronts. The retail push is an important step for Microsoft in its quest of increased vertical integration.

Microsoft has now said that it opened 51 new stores throughout the year, including its first international locations. That figure includes both full retail locations as well as smaller "specialty" stores.

That's also more stores than Apple opened this year. The Mac maker set up 33 new retail stores during its fiscal 2012, although Apple's retail network is more mature domestically than Microsoft's, so Apple's focus has been on international expansion. Out of those stores, 28 were outside of the U.S.

Microsoft has now announced the first round of store openings set for 2013 around the country:

  • The Shops at La Cantera, San Antonio, Texas
  • Dadeland Mall, Miami, Fla.
  • Beachwood Place, Beachwood, Ohio
  • Westfield San Francisco Centre, San Francisco
  • City Creek Center, Salt Lake City
  • St. Louis Galleria, St. Louis

The relatively limited Microsoft Store network is one reason why Surface sales have been off to a slow start, since the new tablet launched exclusively at the software giant's own locations. Microsoft is now increasing production of its first-party device as well as expanding availability to third-party retailers.

The real unknown for investors is whether or not Microsoft's risky retail strategy is paying off or not. When Apple launched its retail stores over a decade ago, it was considered misguided, as PC maker Gateway was flailing with its own retail stores at the same time. Over the years, Apple has proved its skeptics wrong.

Until Microsoft starts reporting relevant figures for its retail operations, investors may never know if it was worth it.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


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