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Microsoft plans to open stores for its products

The Baltimore Sun

Despite being mocked in Apple ads and losing market share to its Cupertino, Calif., competitor, Microsoft isn't giving up the fight.

Late Thursday, Microsoft announced that it had hired a former Wal-Mart manager, David Porter, to open a chain of branded Microsoft stores.

Porter, who is set to start work Tuesday, is charged with improving the PC-buying experience. The company said his first task will be to set the timing, locations and design of Microsoft-branded retail stores, which will sell computers installed with Microsoft software as well as other company products.

The idea is to make it easier for customers to buy and check out Microsoft products, such as the XBox, Zune and new Windows operating systems.

But will the strategy work in a dismal retail climate, for a company that announced its first big layoffs this year? And how do you compete with Apple stores, which seem to draw in passersby at will?

"In terms of demand generation, Microsoft is putting the cart before the horse," analyst Allan B. Krans of Technology Business Research wrote in a research note. "Stores do not draw consumers to products; innovative products bring consumers into stores."

Apple's store coincided with the launch of the iPod, which drew people to stores. Microsoft's problem, Krans said, is that it doesn't have anything particularly exciting. Microsoft's customers and core base are different from Apple's, he said. Not many dedicated PC users are willing to sleep outside a Microsoft store for the newest Windows operating system, the way Apple fans did for the iPhone.

"Microsoft cannot lay claim to being new, hip, or edgy," he wrote.

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