04.21.11
If Microsoft Stores Were Independent, They Would be Bankrupt by Now
Summary: Possibly because Microsoft is disliked by the public, the Microsoft stores fail miserably (unlike Apple’s)
MICROSOFT is losing money. A lot of money. Some products are profitable, but many are not. Microsoft is known to have borrowed money for reasons that even financial analysts struggle to explain. One of our readers, Wayne, has been looking more closely into the numbers and he found out facts that the corporate press rarely reports, maybe because it is afraid of the backlash. Anyway, one news site says that “Microsoft Executives [Are] In A Heated Battle Over Opening More Retail Stores”. Just like many other endeavours and quite famously search, it turns out that Microsoft’s stores are money down the drain. It should never have begun. Surface, which was going to be axed before Gates vetoed the decision, led to massive waste of effort and money. It’s one of those things that Microsoft does out of jealousy, maybe Apple envy (or Google envy in the case of the Web). The article about Microsoft’s losses in stores actually comes from a Microsoft guy, Lance Whitney, who is citing another, Matt Rosoff (career associated with Microsoft, the company, and it shows [1, 2, 3, 4, 5, 6]). Here is the excuse:
Plus, most of the stores have so far failed to turn a profit, according to Business Insider. One reason is that many of the products they sell are available at a variety of other retail chains.
No, this is not the reason. People do not choose a computer with Windows. In fact, they never choose Windows, it is enforced upon them due to market distortion which the European Commission will hopefully challenge very soon (people just need to be heard, in order for regulators to actually know that Windows licences are not used by many buyers). That’s why Microsoft is not succeeding. People do not want Microsoft products, they are simply forced to pay for them. When this forcing ends, so will Microsoft’s monopoly, which relies on Windows as a common carrier. Windows sales have been declining for several consecutive quarters now. █
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J.H. said,
April 21, 2011 at 4:36 pm
Why would Microsoft for any reason have decided that they needed their own retail store?
Message to Redmond: You are NOT primarily a hardware company like Apple is. I can get all of your products at the local Best Buy or Staples, or evem Wal-Mart if I really want them. You are not as slick of a marketer as Apple is either.
twitter Reply:
April 21st, 2011 at 8:55 pm
The first Microsoft stores made some sense from a PR point of view. They used these to create a perception of value based on appropriating brand trust from other companies and a few glitzy tricks for the ignorant in high traffic locations. One early store that I was told about was a collection of Sony laptops and other expensive gadgets in a Casino. No one bought anything there but it may have created a “classy” impression in the type of people who visit casinos in glamorous Shreveport, Louisiana.
Even that, however, was a boondoggle, and the rest is pure lunacy. Since the start of the latest leg of the great recession, this location is not even high traffic anymore. I can’t imagine what ghost towns their other locations must be. Windows is not a people magnet by a long shot and even stores next to one won’t be visited much. If the image they wanted was glamor, they are not going to get it with empty stores. They can’t even make it look good on their web site.
I predict the next wave of channel stuffed Microsoft partners going bankrupt soon. Office Depot is always empty when I look. Best Buy has problems but they have a lot going on besides Microsoft. Few big box stores would have bet big on Vista 7 after the punishment Vista gave them. Any dumb enough to trust Microsoft again will go the way of Circuit City and CompUSA. Vista failure laptops are still showing up on the shopping networks.
Dr. Roy Schestowitz Reply:
April 22nd, 2011 at 12:19 am
More shops are likely to just stock Honeycomb (Android/Linux) tablets to make sales.