Paul Andrews

Most of the reaction to Microsoft's announcement that it will open retail outlets has focused on Apple, with good reason. Apple stores are the liveliest retail thing going right now, even in the downturn.

So universal is the perception that Microsoft's entertainment/devices chief Robbie Bach even went so far as to deny any imitation. Bach's logic: Apple started Apple stores as a way to sell Macs, and Microsoft doesn't sell computers.

Well, Robbie's half right: It's a sure bet that Microsoft isn't starting retail outlets as a way to sell Macs. You can take that one to Vegas.

In any case, I doubt Apple is worried about prospective competition. If anything, Microsoft's foray risks sending PC customers screaming with their hair on fire to Apple more than it poses any conversion of Mac users. In any straight-up comparison, there's no way Microsoft can compete with Apple stores. But then, no retailer can. Apple stores are about the only place you can walk into these days and feel excited about buying something.

Not to worry: Apple is not Microsoft's target here anyway. The real goal is restoring, even enhancing, its brand name against competition, and for partnerships, on all sides — Linux, games, phones and especially media (particularly music and video), where Microsoft is barely a player.

It's important to understand Microsoft is not going into retail because it wants to (otherwise it would've done so long ago), but because it has to. Windows (and the operating system in general) is fading into irrelevancy. The upgrade cycle as a profit center is pretty much over; .xx upgrades are free, and users have learned to just wait and do a major upgrade when they buy a new computer. And Microsoft's once-proud reputation is in tatters. Zune is a joke. Vista is a crime. The Apple ads have done wonders for ridicule as a business strategy. Tech watchers long in tooth (like me) think of Microsoft today the way we thought of IBM in the latter '80s and early '90s: Big, slow, laughably clueless. Back then, the ultra-rad company was Microsoft.

And now is not a bad time (despite what some observers say and intuition might suggest) to jump into retail. Customers are ripe for a quality buying experience and will be receptive to something new and presumably attentive to them. More important, plenty of prominent, once-expensive retail space is available at a good price. Heck, some agents might let Microsoft move in just to keep the utilities paid, especially if Microsoft tosses in a new PC with the deal.

Microsoft also has more upside in merchandise to offer these days, from games to phones to things we don't yet know. Recall that when Apple started its stores eight years ago, it did not even have iPods to sell. Instead what it was trying to do (and Bach knows this) is restore Apple's brand identity, partly by aligning its name with reputable vendors (Sony, Canon). Microsoft can do the same for itself in the same way, as well as provide a quality retail experience for downtrodden PC buyers who have long suffered the insults of CompUSA (RIP), Circuit City (RIP — no, make that burn in hell), Fry's (don't send that one to Vegas!) and others.

Where retail stores pose the biggest opportunity, though, is for the coming media revolution. We're entering the "iPodization" of all media, with a whole constellation of devices capable of high-end everything, including video on demand. If Microsoft ever hopes to recapture a growth scenario, it will have to be in this arena. These devices for the most part need hands-on to sell, particularly if they carry service contracts. Whether having stores guarantees success here may be in question, but I can guarantee you what will happen by not having them.

My one caveat involves an imitation Genius Bar for Microsoft stores. If all those suffering Windows hordes get the idea they can bring their computers in to fix, the whole store concept will blow up in Microsoft's face. There's a reason no other retail presence in the world has something like a Genius Bar, yet it's the single biggest factor in the Apple stores' resounding success. Microsoft, whose customer support over the years has been just plain dismal, desperately needs service like what Apple offers through its warranty and Genius Bar, but it will have to involve something other than direct customer involvement. That Windows hairball is just too gnarly to unravel in a 10-minute appointment.

(Disclaimer: I own both Apple and Microsoft stock.)

Online journalist and blogger Paul Andrews, co-author of "Gates," wrote about technology for The Seattle Times and other publications beginning in the early 1980s. See related note to readers.