Right now Microsoft has 11 brick and mortar store locations; well, 12 if you count the Apple store that was branded in their honor. As far as we can tell most of these locations are not profitable, but that doesn't seem to detour Steve Ballmer from pushing forward with 75 new locations across the U.S. There is speculation that this is an assertive move to compete with Apple, which has around 300 physical locations, the real question however is, what does Microsoft have to gain from all this?
Since at least early April of this year there has been a hot debate among the Microsoft executive circle about whether or not this is going to benefit them. Certainly there are a lot of different factors here. Take for example, the success of Apple stores. It's true that iPods and iPhones are sold almost everywhere under the sun but Apple still largely retains iMac and iPad for themselves, with the exception of Best Buy and maybe a couple other retailers. I believe the reason they can pull this off is because Apple exercises the philosophy that you should have to purchase 4 devices, iMac, iPad, iPhone, iPod to do the job of 1. It also just so happens that 2 of those 4 can almost only be found at an Apple store.
For more of our thoughts on the matter, hit the break. Also, don't forget to visit PLuGHiTzLive.com and click the link in the center for the still-digital Microsoft Store. Tell them Jon sent you.
Microsoft has tons of hardware manufacturers distributing their devices and probably every electronics retailer in the world that isn't Apple is selling them. Microsoft is playing the game on a much higher level than Apple too. Take their 350 million Windows 7 licenses compared to Apple's 20 million for their desktop OS. If they didn't have some 640,000 partners they might not have enough hardware out there to get those numbers. Even with 300+ Microsoft Stores, I'm not sure they could afford to keep near exclusivity on a product and have it become widely adopted very quickly.
What would entice customer to visit a Microsoft Store rather than somewhere like Best Buy? If you've ever been to a Best Buy, then obviously product knowledge and customer service would be two good reasons to visit the Microsoft Store instead. Hardware manufacturers are responsible for product defects and non OS support. Microsoft handles product support very well through documentation and online/phone support so they wouldn't really need a store for that. It is possible that marketing is a big part of this. Traditionally, Apple beats Microsoft at marketing hands down. They have to or they wouldn't have a leg to stand on. Microsoft might be trying to bring itself front and center by creating a physical manifestation in the form of a retail store which would be great PR but I don't think putting themselves in competition with their retailers will make them easily profitable.
There might be some hidden genius in all of this, Microsoft can be a crafty company. At the very least it will be fun to visit one if they come around.