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So that's what it's come to? Mr. Softy's Apple (Nasdaq: AAPL ) envy is about to be made real as Everyday Cheap Software? Talk about the dumbest idea ever.
Microsoft, for its part, touted the move as a means to improve customer engagement on forthcoming products. "This is an exciting time with our strong lineup of upcoming product releases including Windows 7 and new releases of Windows Live and Windows Mobile," Chief Operating Officer Kevin Turner said in a company press release. Continuing:
We're also working hard to transform the PC and Microsoft buying experience at retail by improving the articulation and demonstration of the Microsoft innovation and value proposition so that it's clear, simple and straightforward for consumers everywhere. [Emphasis added.]
So, Microsoft's retail stores will help show off ... Windows? That's a funny way of expressing Apple envy; the iEmpire's own stores are designed for playing with Macs, iPhones, and iPods.
Partnering with Dell (Nasdaq: DELL ) and Hewlett-Packard (NYSE: HPQ ) could help to replicate this experience -- maybe -- but even then, I doubt it'd lead to anything more than an incremental sales improvement. There just isn't a pressing need for engagement when you control close to 90% of the market for computer operating systems.
Apple's brand was well-respected and well-known, but for most consumers, it was ephemeral before its retail stores arrived. Their playground format transformed gawkers used to glass-cased displays into hands-on testers and, ultimately, buyers.
Retail was a perfect fit for Apple, in other words. Not so much for Microsoft, whose customers are:
- Developers. Some coders are mall rats, sure, but they go to the galleria for books, lattes, and hipster gear. They get their hacker tools online, as we do.
- PC manufacturers and corporations. Your average IT manager doesn't shop retail. More often, he'll employ the services of a systems integrator or consultant. But you knew that; it's why IBM (NYSE: IBM ) and Infosys (Nasdaq: INFY ) each have billion-dollar services businesses. Manufacturers, meanwhile, already do the job of catering to home consumers by installing Windows on their PCs.
- Gamers. If there's an audience hoping to see Microsoft at the mall, it's the Xbox and Zune enthusiasts -- the caffeinated crowd that buys from Mr. Softy's Entertainment and Devices Division, which accounted for 13% of revenue over the trailing 12 months.
But if Microsoft's press release is to be believed, these aren't the customers its retail stores will cater to. It wants more windows for Windows. Dumb move, Mr. Softy. You can do better. I'll be back Tuesday to describe how.
Now, I'd be remiss if I didn't mention that fellow Fool Anders Bylund has an opinion that is completely opposite to mine, as he believes Microsoft's doing something really smart here. What do you think? Email me here, or use the comments box below. Or, if you're feeling especially bold, log into Motley Fool CAPS and rate Microsoft now. It's 100% free to participate.
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