Microsoft Stores puzzle shoppers

Dec 10, 2010 By Nathan Olivarez-Giles

It looks like an Apple Store, filled with eager employees in brightly colored T-shirts. Laptops, smart phones and MP3 players are arrayed on modern tables for anyone who wants to try them out.

There's even a desk in back where people can walk up and get expert technical help.

But the similarities between the and the begin to fade at the cash register - or at least they did one recent Saturday afternoon at a Mission Viejo, Calif., mall.

Over a half-hour period, 19 people walked out of the mall's Apple Store carrying purchases in one of the company's signature white bags. By comparison, just three walked out of the nearby Store with merchandise.

The survey may not have been scientific, but it reflects what analysts say is the challenge Microsoft Corp. faces in taking on Apple Inc. in America's shopping centers.

"The Microsoft Stores, it seems so far, lack the same cool factor as the Apple Stores," said Phil Baker, an independent technology analyst and consultant in Solana Beach, Calif. "It's not entirely clear as to what the goal of the Microsoft Stores is, but it doesn't seem to be as much about sales as it is about building the brand."

Some shoppers are also scratching their heads.

John Smits of San Clemente, Calif., bought a laptop at the Mission Viejo store, lured by a discount he found out about on . But he said the Microsoft Store lacked the exclusivity that draws consumers to the Apple Store.

"Everything sold here can be bought somewhere else, likely for a lower price," Smits said. "There is no exclusive product here to pull me in. But at the Apple Store, there's all kinds of stuff I can't get anywhere else."

One problem, he said, is that though the Microsoft Store sells dozens of computers, made by many different companies, the options are largely limited to what's in the store.

"What if I want the Samsung laptop but I want a bigger hard drive? What if I want a larger screen?" Smits said.

"Best Buy has more variety, better selection. And any computer company has more options online."

Microsoft turned down requests to talk about the stores and its long-term retail plans. When its first stores opened last year, retailing Vice President David Porter said the aim was to "showcase what's possible with the full Microsoft brand."

"Our customers have told us they want choice, better value and great service when shopping for technology, and that is what we will deliver through our Microsoft Stores," Porter said.

There was no mention of Apple, which has steadily gained market share since opening its first two stores (in McLean, Va., and Glendale, Calif.) in 2001. The Cupertino, Calif., company is now a retailing juggernaut, with more than 300 stores worldwide that generated an estimated $3.57 billion in revenue last year.

Microsoft's retail presence is still tiny by comparison, with seven stores opened over the last year, in Scottsdale, Ariz.; Mission Viejo; San Diego; Lone Tree, Colo.; Oakbrook, Ill.; Bloomington, Minn.; and Bellevue, Wash.

John Jackson, an analyst at CCS Insight, said the company might be trying to heighten its image with consumers.

"When you walk into an Apple Store, you're walking into an Apple world, an Apple lifestyle, and you see how everything they do can fit into what you do in your life," Jackson said.

"Microsoft has never had that, until they opened their own stores," he said. "I think one of the overarching objectives for the stores is an 'aha factor' that 'yeah, Microsoft does deliver all this stuff.' "

Julie Pendleton of Laguna Beach, Calif., said she's a fan of the stores and would like to see more of them.

Sitting in a leather chair in a living-room display, she remarked on the Kinect motion controller for the Microsoft Xbox 360 that children were playing with in the store.

"I'm going to buy this for my son and my grandkids," Pendleton, 65, said. "I'll kick their little butts in these games."

Without the Microsoft Store, she said, she probably would never have known about the Kinect.

"I don't hang out in the video game section too much at Best Buy," Pendleton said.

Lea Encarnacion, who works at the Nordstrom department store near the Microsoft Store, said she really wanted to buy something at the Microsoft Store but just couldn't find what she was looking for.

"I wish Microsoft had a little more out there to look at," Encarnacion said. "The Apple Store has a lot more options. It sort of felt like the Microsoft Store just didn't have as much stuff in it and the stuff they had wasn't what I wanted."

Encarnacion was looking to buy an MP3 player for a friend. The 22-year-old described the Microsoft Store experience as disappointing.

"I'm a Microsoft person," she said. "I know Apple is supposed to be more user-friendly, but I've grown up with Microsoft. I like Microsoft. But for something like this, a birthday gift, I'm honestly looking for something cool and at the cheapest price. And I didn't find that in there."
---

MICROSOFT AND APPLE STORES AT A GLANCE:

Microsoft Store:

-Total: 7

-Year established: 2009

-Items sold: Microsoft Windows software, Microsoft Office software, Xbox 360 video game system and games, Microsoft Zune music players, laptops from other manufacturers running Windows, cell phones built by other manufacturers running Windows Phone 7 software

Apple Store:

-Total: 320

-Year established: 2001

-Items sold: iPhones, iPad tablet computers, iPod music players, iMac desktop computers, MacBook laptop computers, Mac OS X operating system

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