Now that Microsoft is going down the retail route could there be a better time for a partnership or simple takeover of The Source by Circuit City stores?
Microsoft has announced no plans for a retail store in Canada, yet. They have said it will open retail stores in the U.S. that will feature Microsoft consumer related items as well as PCs and notebooks from Microsoft OEM partners.
Since The Source by Circuit City is now available to the highest bidder it would make some sense for Microsoft Canada to look into this kind of transaction.
The vast majority of The Source By Circuit City retail outlets are small, profitable and in all the major malls in Canada.
I am sure Microsoft would like to follow Apple’s lead and open a downtown location in major cities such as New York, Chicago, Los Angeles and Toronto. But, after that all the action is in the malls.
I have visited about a handful of Apple stores in the U.S. and Canada and by far the ones at malls get more foot and eye traffic.
Also it would not cost that much to buy The Source by Circuit City since they are under CCAA bankruptcy protection.
The main challenge for Microsoft is that consumer confidence is at an all time low. Opening a retail outlet for computers, software and other gadgets will be a challenge.
But, Microsoft can use a store as a loss leader. What better showcase for its products than a store where people can walk in a try an Xbox or a Zune digital media player or sit down and watch movies and TV on media centre equipped PC?
If Microsoft can make these stores fun for kids and adults it would go a long way to enhancing its image with consumers who think that Apple is an easier and cooler way to do computing.
Matt Rosoff, an analyst with Directions on Microsoft, said that the software giant can’t fill a store with its own products and would have to partner with other vendors. I agree with Rosoff. This is one of many reasons why Microsoft should buy out The Source stores in Canada. These stores are tiny and filled with stuff. Microsoft can do a retail makeover of sorts and create roomier stores that can put people closer with technology.
Also a store can provide a place for major announcements. Apple current uses its retail stores to create lineups and hype for new products such as the iPhone and iMacs. Imagine Microsoft releasing Windows 7 at is own retail store. Since most people do not like Vista they would be lining up for hours to get Windows 7. This would create hype and momentum for the new operation system.
Having said all this, I do not expect Microsoft to place a bid for The Source by Circuit City stores. However, it is an option they could consider to get into the market place quicker in Canada.
What do you think? Do you think Microsoft should bid for The Source? Would Microsoft be the white knight for The Source by Circuit City? Let me know.
Three quick hits before I go. David Morelli, long time friend of CDN is leaving Cohn & Wolfe to be the director of communications for Tim Hortons. I want to wish David the very best.
Also Michelle Ghandour is leaving High Road Communications for a position of Rogers Wireless. CDN also wishes her the very best.
Javid Aziz, the former CEO of CryptoLogic Ltd. maybe in a lot of trouble. The ex-CEO is in material breach of various contractual obligations related to his severance from the company, CryptoLogic said in a release. Aziz may have to return the EUR 1.543 million paid to him by the company.