"Microsoft (NASDAQ: MSFT), having watched Apple's success at running its own stores, has decided to get into retailing as well," reports Bill Martin in his BullMarket.com advisory.
"Microsoft began its new retail effort by announcing last night that it had hired a veteran retail executive to lead it. The software giant hired David Porter away from DreamWorks Animation SKG, where he was head of worldwide product distribution.
"Prior to joining DreamWorks in 2007, Porter had spent 25 years at Wal-Mart, where he held a variety of jobs in store operations, merchandising, and information technology.
"Porter's last job at Wal-Mart was vice president and general merchandise manager of entertainment. His first job at Microsoft will be to decide the details of what the stores will look like and where and when they might open.
"Microsoft said his job is meant to complement the work it is already doing with retailers and he will collaborate with the people running existing retail programs in Microsoft's Entertainment & Devices Division.
"This is a curious move in that Microsoft is primarily a software company; its only significant retail hardware products are the Xbox 360 video game player and the Zune MP3 player, which don't seem to need their own store.
"But it's also clear that Microsoft feels it is misunderstood by much of the public; its latest advertising has been geared to showing how integral its software is to the everyday lives of Americans.
"If the store concept can help with the company's broader marketing goals, then there is no reason not to try.
"The real money for the foreseeable future, however, will still come from Windows, its server systems and other software products, which have made Microsoft the cash cow that it is. It is one of the reasons we think Microsoft has our buy rating."
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Reader Comments (Page 1 of 1)
2-19-2009 @ 12:41PM
e.krabs said...
I do find this move a little baffling.
For a long time, Apple was available only through their online website. And yet, they were attempting to sell an unique line of hardware and products that would benefit greatly from a physical presence. In other words, I believe the stores are critical to its survival and growth, regardless of its cost.
Microsoft is in a different category. Perhaps I also do not "get" what Microsoft is trying to tell me, but I don't see why they need a store, or how it would benefit them. In fact, I kind of see it as a loss-leader; an expensive form of marketing towards a biggest message? But would that work? And if even if it does work, would it be worth it? And what would that message be?