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Microsoft seizes floor space in Best Buy for Windows mega mini-stores

Gregg Keizer | June 14, 2013
Could 'move the needle' on Windows 8 and new form factors, argues analyst.

"How much the Windows Store can move the needle on the overall market remains to be seen," said a skeptical Gownder, who nonetheless acknowledged the move gives Microsoft "a powerful asset in selling Windows 8.1 devices and other consumer offerings." Windows 8.1 is the official name for the Windows 8 upgrade that will launch as a public preview June 26, and officially ship this fall.

"What's Microsoft's thinking here? It's the same thing it's trying to do with its own stores, get more control over the Windows in-store and selling experience," said Baker. "They're trying to do what they can to improve that experience and make it more competitive with the Apple experience."

Microsoft will remodel the computer departments of about half of Best Buy's U.S. and Canadian outlets, turning them into Windows Stores to pitch the company's products as well as those of its OEM partners. (Image: Microsoft.)

Apple's chain, the majority of which is in the U.S., is widely seen as the top-tier benchmark in electronics retailing.

Last month, both Moorhead and Baker criticized the retailing of Windows 8, Windows RT and the devices powered by the two new operating systems. They slammed retailers, especially big-box chains, for a slew of mistakes, all of which contributed to an inability to effectively merchandise the new Windows 8, touch-enabled devices as well as the more-or-less traditional PCs running the OS.

The in-Best Buy Windows Stores are Microsoft's answer. "This shows that Microsoft understands that the requirements to merchandise Windows 8 are higher than [for preceding versions of Windows]," said Baker. "This gives Microsoft the chance to make sure that any of those support hurdles to sell Windows 8 and 8.1 are met, and clearly starts them down the road to creating a more competitive experience."

That control won't be complete, according to the analysts who had been briefed by Microsoft.

Best Buy will retain control over product selection, inventory and pricing, but Microsoft will have some say in any special placement of other OEMs' products, said Moorhead.

That could create more tension between Microsoft and its OEM partners, adding to the already considerable strain in their relationships since Microsoft unveiled its Surface hardware a year ago. "It could make for more friction," Moorhead said. "Anything that changes the dynamic between manufacturers and retailers will. But the one with the biggest checkbook gets control, especially in retail."

Gownder echoed those concerns. "Microsoft's Windows OEM partners already have a bone to pick with Microsoft concerning the Surface," he said. "How will they feel about having to compete with Microsoft's own hardware in a Windows Store managed by Microsoft?"

But all three experts applauded the move into Best Buy, which will almost instantly expand Microsoft's retail footprint by nearly a factor of 10. Additionally, assuming the Microsoft-trained Best Buy workers are up to snuff, they should be able to better explain Windows 8 and the hardware, and help consumers make intelligent choices.


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