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Microsoft To Leap Back Into Retail This Week

Microsoft will open the first of its planned retail stores this week in Arizona, in an apparent effort to build buzz around its products as Apple has done with remarkable success.

According to a recent advertisement in The Arizona Republic, the launch event at the Scottsdale Fashion Square mall will include a performance by pop star Ashley Tisdale, and the first 1,000 visitors will receive concert tickets and a gift bag. Microsoft is also dishing up some grand opening special offers, with customers that buy new PCs receiving a free HP-D 1660 printer or a free copy of Office Home & Student edition.

In July, Microsoft COO Kevin Turner vowed that Microsoft would open some retail stores "right next door" to Apple stores, but the Scottsdale location doesn't fit this description. However, Microsoft's Mission Viejo store, which will be located at the Shops At Mission Viejo mall, will at least be within the same complex.

Regardless of where they're located, Microsoft's retail stores are opening in a climate of extraordinarily weak PC demand. But in addition to Windows 7 PCs, the Arizona store will also reportedly feature mobile phones running Microsoft software and Xbox 360 game consoles, as well as a massive 94-inch video screen, according to The Wall Street Journal.

Microsoft in August posted several job listings, including sales, customer service, and technical advisory positions, most of which required applicants to be able to lift at least 50 pounds, which suggests that these will be more than just places to showcase Microsoft Research projects.

Microsoft has shown a dogged determination in recruiting experienced retail executives from other companies. In February, Microsoft brought in 25-year Wal-Mart veteran David Porter to lead its retail store push. In July, Microsoft hired former Apple real estate executive George Blankenship as a consultant, reportedly to help in identifying optimal locations for the Microsoft stores.

Many industry watchers also expect Microsoft to use the stores to exert more influence over how customers perceive its products, which in the past has been a sore spot due to Apple's effective "Get A Mac" advertisements.

This actually isn't Microsoft's first retail foray: From 1999 to 2001, Microsoft operated microsoftSF, an 8,500-square-foot retail space in San Francisco's Metreon shopping center that featured some 160 hardware and software products, as well as clothing, office supplies, and other trinkets adorned with the microsoftSF logo. Microsoft will obviously have to offer more than that this time around if the new stores are to have any chance of succeeding.

Indeed, although the economy appears to have stabilized, Microsoft is taking a huge financial risk by getting into retail at this particular point in time. The Microsoft Stores had better be impressive, and they'll have to be significantly differentiated from Apple's stores. Otherwise, Microsoft's retail push probably isn't going to last very long.

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