Microsoft -- Coming Soon to a Mall Near You?

Last week was a big one for Microsoft (Nasdaq: MSFT  ) . The Windows 7 launch went off smoothly by all accounts, and Redmond can start putting the Vista debacle behind it. "Good riddance," say many consumers, reviewers, and pundits. Also, the company reported stronger-than-expected earnings, and saw its stock pop in a way that would make any $250 billion company blush.

But that's not all. In the lingering desert heat of Scottsdale, Arizona, the first Microsoft-branded retail store opened. Some might say that Microsoft is desperately trying to duplicate the Apple (Nasdaq: AAPL  ) store and its unquestioned success, and it's easy to dismiss this store as a simple copycat effort.

The critics may be right about the Apple-tinged inspiration, but Microsoft is putting its own spin on this one. Apple likes to keep its stores cool, clean, and uncluttered; Microsoft plastered the walls with high-definition screens, and there's a 94-inch screen hooked up to an Xbox 360.

The Apple stores are built to "simplify and enhance the presentation and marketing" of Apple products, and I think the keyword here is "simplify." From what I can tell, Microsoft is going more for the Vegas-style sensory overload and participation angle. In fact, the focus on eye candy and toys reminds me more of the Sony (NYSE: SNE  ) outlet in Tampa's International Mall than the Apple store next door. That's probably no accident.

The first Microsofties reportedly lined up outside the store on Wednesday, and the line stretched out of the Fashion Square Mall by the store's opening time. Early buzz seems to be healthy, but that will fade away soon enough. I mean, CompUSA opening its first store in Tallahassee was big news at the time, and we know how that worked out.

I still think this is a smart move by Microsoft -- and the company is approaching the retail sector with brains and poise aplenty. David Porter, who runs Microsoft's new retail division, comes with decades of experience from retail giant Wal-Mart Stores (NYSE: WMT  ) and Shrek creator DreamWorks Animation (Nasdaq: DWA  ) , and he seems to have brought plenty of visual flair to this project. And Microsoft's portfolio of consumer products is wide enough that even a weathered old tech geek like myself should run into a surprise or two in this store.

By heading into its own smallish-format mall stores, Microsoft also avoids stepping on the toes of major sales partners like Wal-Mart and Best Buy (NYSE: BBY  ) . If the Microsoft store concept crashes and burns, at least the company won't have burned any bridges with longtime friends and partners. It's worth a shot. Can't hurt, might help.

What do you think? Is Microsoft being stupid or visionary in Arizona? The comments box below is anxious to hear your thoughts and pass them on to Steve Ballmer.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Ballmer will get your comments if he reads this page -- I think that counts as "passing on." Apple, Best Buy, and DreamWorks Animation SKG are Motley Fool Stock Advisor picks. Best Buy, Microsoft, and Wal-Mart Stores are Motley Fool Inside Value recommendations. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On October 26, 2009, at 12:13 PM, DefunctAcct wrote:

    Microsoft's retail project is neither stupid nor visionary, it is necessity.

    For Microsoft, this is a necessary project even if it does not become a profit center. For Apple, Microsoft stores are not different than any other PC outlets.

    Apple stores allow Apple to properly present its products to potential buyers. Consumers can learn, obtain services and decide whether to purchase Apple products. Microsoft stores will do the same. I will certainly browse the store for software titles and look at machine samples. If the staff is properly trained, they will be much more effective than anyone else out there selling PC related products.

    This is a win-win-win situation for consumers.

  • Report this Comment On October 26, 2009, at 3:08 PM, Matt015 wrote:

    Apple's customer service is horrible. They believe that customers paying hundreds to replace a worn out battery should be happy.

    Microsoft would have a great opportunity to outshine competition but one simple ingredient is missing. Microsoft branded hardware. Microsoft has demonstrated an ability to make great hardware products, examples include the Xbox 360, Zune HD, PC accessories, etc.

    Now it is time for Microsoft to go head to head with competing PC hardware makers. Sure this would upset Dell, HP, and a host of others but what choice do they have besides accepting the new competitor. Jumping ship and preloading Linux based software would be suicide.

    Microsoft can capture a larger market by rolling out its own hardware. They should do this yesterday.

  • Report this Comment On October 26, 2009, at 3:28 PM, RTFM2009 wrote:

    I think this is a great move on behalf of Microsoft.

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