Apple Readies New N.Y. Store, Microsoft Mum About Retail Plans

 
 
By Nicholas Kolakowski  |  Posted 2009-11-12 Email Print this article Print
 
 
 
 
 
 
 

Apple plans to open an additional retail store in New York on Nov. 14, and says it will open 40 to 50 stores worldwide in 2010. Although Microsoft has said it will challenge Apple aggressively in the retail space, comments from Microsoft spokespeople seem to indicate that a wait-and-see approach will follow the October opening of its retail locations in Scottsdale, Ariz., and Mission Viejo, Calif.

Apple plans to rapidly expand its retail footprint, with 40 to 50 stores set to open worldwide in 2010. The majority of those storefronts will be opened in various international locations such as London, Paris and Shanghai, according to a Nov. 12 report from Reuters.  

The new locations, including a planned store in the Louvre, will add to the 280 stores that Apple already has in place, three of them in Manhattan. The information about the company's retail plans was revealed in connection with Apple's new outlet on Manhattan's Upper West Side, which is opening on Saturday, Nov. 14, at 10 a.m. ET.

Like Apple's Fifth Avenue location, the Upper West Side store is a building-sized glass box; but unlike that store, where both the retail and Genius Bar reside underground, the new one will feature retail at ground level and the Genius Bar in a basement area.

Apple's announcement of its plans comes a few weeks after Microsoft opened its second retail location, in Mission Viejo, Calif. Microsoft opened its first store on Oct. 22 in Scottsdale, Ariz. Despite earlier saying it would pursue an aggressive retail strategy, Microsoft seems to have toned down some of its rhetoric in that department.

"We plan to open additional stores in the future," a Microsoft spokesperson told eWEEK when approached for comment. "For now, though, we will open these first two stores, listen to and learn from consumers, evolve the model, and open additional stores as quickly as it makes business sense."

The Microsoft store in Mission Viejo shares a mall with an Apple outlet-currently closed for renovations-making head-to-head comparisons between the two tech giants' retail efforts inevitable, at least on a local level.

Microsoft hired George Blankenship, a former Gap executive who helped launch Apple's retail efforts in 2001, to help with its stores. During Microsoft's Worldwide Partner Conference in New Orleans in July, the company suggested that it would assume a more directly competitive stance against Apple.

"We're doing stuff and we're in the game and continuing to take some of these hard market-share opportunities head-on and compete because it's a test of will," Microsoft Chief Operating Officer Kevin Turner told an audience during the conference, describing his company as "on the offensive" against Apple. He was followed by Microsoft CEO Steve Ballmer, who suggested that PCs running Windows were regaining share in the PC market at Apple's expense.

"All of our research shows that our 'I'm a PC' ads-that talk dramatically about the price of Macintoshes-work quite effectively," Ballmer said during a Q&A session following his July 14 keynote speech at the event. "We've gained market share quite effectively against Apple over the past six to nine months."

According to statistics company Net Applications, Windows 7's share of the overall PC market rose to 7 percent by Nov. 9, not long after the operating system's Oct. 22 release. Net Applications' most recent report suggested that Microsoft currently holds 92.52 percent of the operating-system market between its various versions of Windows, while Apple holds 5.27 percent and Linux occupies 0.96 percent.

Whether Microsoft will be able to reverse a declining revenue trend in 2010, though, is largely dependent on sales of PCs and other IT equipment over the next few quarters. By contrast, Apple has managed to weather the economic recession in good form, reporting fiscal fourth-quarter results on Oct. 19 that surpassed Wall Street expectations with revenue of $9.87 billion and a net quarterly profit of $1.67 billion.

Apple reportedly earned $3 billion from its retail operations for the first six months of 2009, and Bloomberg estimated that its Fifth Avenue location could have annual sales of $350 million or more.

When contacted by eWEEK previously about the possibility of Microsoft opening a New York location, a spokesperson deferred comment. Microsoft's Arizona and California stores saw a flood of customers during their opening days, likely drawn by the enticements of substantial discounts on electronics and free concert tickets; it is too early to tell, though, how those stores will fare in the long term.

Editor's Note: Editor's Note: This story has been updated to correct the location of Apple's new store to the Upper West Side and to clarify the number of pre-existing Apple stores.

 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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