Microsoft Mini-Stores in Best Buy to Push Windows 8

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By Douglas A. McIntyre Published
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Best Buy Co. Inc. (NYSE: BBY) and Microsoft Corp. (NASDAQ: MSFT) have decided to set a deal for the world’s largest software company to have a store within a store, where Microsoft can sell flagging products like Windows 8. Each company has a troubled relationship with consumers, so the deal is one in which 1+1 barely equals 1.

The companies reported:

Microsoft Corp. and Best Buy Co. Inc. today announced a strategic partnership to create the Windows Store only at Best Buy. The comprehensive store-within-a-store will be in 500 Best Buy locations across the United States and in more than 100 Best Buy and Future Shop locations in Canada.

Ranging in size from 1,500 square feet to 2,200 square feet, the Windows Store will be the premier destination for consumers to see, try, compare and purchase a range of products and accessories, including Windows-based tablets and PCs, Windows Phones, Microsoft Office, Xbox, and more. Each store will feature an innovation space highlighting a variety of Windows scenarios across devices; a showcase section with the latest Windows-based PC form factors such as ultrabooks, convertibles, detachables and all-in-ones — including portable devices; and a standalone area featuring Microsoft Surface.

Microsoft believes that a direct conduit to consumers that allows them to experience Windows 8 in the flesh, along with some of its hardware products, will make sales of the products grow. Unfortunately, Best Buy continues to struggle to get growth in the number of customers it brings in its door, which makes it a poor choice for the distribution of consumer electronics. Microsoft would have been better to team with Amazon.com Inc. (NASDAQ: AMZN), which has crushed Best Buy in the market. However, the world’s largest e-commerce company competes with Microsoft across a broad spectrum of products and services, so the two are best viewed as enemies.

Of course, there is no evidence that more exposure for Windows 8 will help sales. Consumers have rejected it as too difficult to use and too foreign to earlier versions of the operating system. A presence within one large retailer will not help that.

Microsoft continues to have visions that the version of Windows that runs on smartphones will take market share from the dominant Google Inc. (NASDAQ: GOOG) Android and Apple Inc. (NASDAQ: AAPL) iOS. Demonstrations of Windows-powered phones at Best Buy are unlikely to help it gain share. Once again, consumers simply prefer the Android and the Apple systems. The chance for more customers to sample Windows will not solve that.

Finally, the Microsoft store will be lost inside of Best Buy, where hundreds of products are sold already, many from direct competitors to Redmond. Consumers will get to see, in the flesh, why the prefer products that are non-Microsoft. Putting its products side by side with better alternatives is a mistake.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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