Inside the Apple, er, Microsoft Store

Although Redmond's foray into retail bears a big resemblance to Apple's approach, Microsoft has added some distinctive features to draw casual PC buyers and techies alike.

MISSION VIEJO, Calif.--On my way to last month's Professional Developers Conference in Los Angeles, I took a small detour to Orange County to check out the recently opened Microsoft Store there.

Although I had heard plenty about Microsoft's nascent retail effort , I wanted to get a firsthand look.

At a glance, it's easy to understand why the store draws so many comparisons to Apple's stores. The outside of the store features an expansive glass window with a stylized Microsoft logo at the top. Inside, products are sorted into themed sections, with a help desk and theater in the rear, and all around are T-shirted enthusiasts ready to answer any and all questions.

From that standpoint, it's nearly a carbon copy. But even as it mimics much of the Apple approach, Microsoft finds ways to customize its message to its different role in the world. When it comes to laptops, for example, Microsoft is eager to lay out dozens of choices to highlight the variety of prices, sizes, and options available to those buying Windows.

The company is starting small--opening just two stores so far, this one and another in Scottsdale, Ariz. The goal, Microsoft said, is to better understand what customers want at retail and, ideally, persuade larger retail chains such as Best Buy and Office Depot to adapt some of the more successful techniques to their stores.

Apple, by contrast, has become its own most significant channel with its online and retail stores, even though its computers and iPods can also be found at places like Best Buy. From a dollars perspective, Apple's retail stores alone accounted for $1.87 billion of the company's $9.87 billion in total revenue during the most recent quarter. Next year alone the company plans to open 40 to 50 stores, with more than half of them overseas.

But if its scale is different than Apple's, its goal is largely the same: to offer the best possible experience when buying its flavor of PCs and accessories, as well as to be, well, cool.

To that end, Microsoft has pulled out every tool in its arsenal, from PCs to phones to the Xbox 360, as well as a huge "video wall" made up of dozens of 42-inch flat screens connected to form a single, though constantly changing, image or video display.

But by far the biggest draw is a product that isn't even for sale--the Surface tabletop computer.

During the several hours I spent at the store, it was that device, more than the laptops, that drew people in and captured their attention.

Josh Griffin stopped in at the store with his three kids, with all four quickly heading to the Surface.

"This is cool," said Griffin, who came into the store to check out Windows 7 among other things. "I've read about Surface before, but never been able to see it. It's actually a little cooler than I thought it would be."

The three kids began carving virtual pumpkins on the Surface while we chatted, but eventually Griffin turned his attention back to the tabletop computer.

"Can I do one?" Griffin asked his kids, trying only somewhat successfully to elbow his way in.

Surface, though, isn't the only thing worth pointing out.

Microsoft has taken an interesting approach to selling PC software--the category it is best known for. Although Microsoft stocks dozens of software products on its back shelves, hundreds more titles are available on-demand. Customers can browse on a touch screen through the various options and once they select a product, it can be burned to disc in the back of the store, complete with a professional-looking disc label, DVD case, and manual.

"We're like legal pirates," said Steven Precious, COO of Tribeka, the company whose system Microsoft uses in its stores. Precious just happened to be checking in on the Mission Viejo store while I was there.

The software maker also uses its position as retailer to influence what software is loaded onto the PCs it sells. While Microsoft the operating-system vendor is required by antitrust decrees to allow computer makers to install whatever software they wish, Microsoft the retailer is allowed far more say.

As a result, PCs sold at the Microsoft Store come with what Microsoft calls its "signature" software collection --a bundle that includes Windows Live products, Zune jukebox, Bing search engine and Microsoft Security Essentials antivirus software.

Having its own stores also allows Microsoft to try to match other areas in which Apple benefits from its direct contact with consumers, such as offering in-store support. Where as Apple has its "genius bar," Microsoft has an "answers desk." Both Apple and Microsoft offer a theater in the back for various trainings.

Microsoft is also trying to match Apple's passionate workforce. The retail store employees are made up of Windows enthusiasts, some of whom moved across the country to work at a Microsoft store. As evidenced by a recent YouTube video , the staff can be accused of many things, but a lack of passion is not one of them.

One of the key questions in my mind, though, is whether business will be brisk enough to allow Microsoft to profitably operate. The software maker has said it intends to run its stores as a business, meaning that to expand well beyond its current two locations, it will need to show an ability to not just look pretty, but also make money.

Correction: An earlier version of this story incorrectly reported the amount of revenue Apple gets from its retail and online stores. Apple got $1.87 billion in revenue last quarter from its retail stores alone; the company does not break out sales from its online Apple store.

 

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