GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

A Smart Move By Microsoft That Is Worth Watching

August 26, 2014 | About:
sandyinvestment

sandyinvestment

1 followers

In the wake of offering space to Samsung small stores, Best Buy (BBY) is progressing with the strategy by affirming that Microsoft (MSFT) will open 500 smaller-than-usual stores inside the huge box retailer through the following few months. The Microsoft stores will be enormous. While Microsoft has around 70 stand-alone Windows stores as of now, this move will permit the organization to enormously stretch its retail presence rapidly and without the overhead of running it stores. This seems like a decent move for Microsoft as well as for Best Buy.

What this means for Microsoft

Furthermore since a great part of the reviews and editorials are negative, referring to a learning bend and a confusing interface, a lot of people are discounting the devices promptly. Microsoft can battle this by permitting individuals the opportunity to attempt the devices on a bigger scale, and the Best Buy bargain does precisely that.

With the approaching release of Windows 8.1, a real overhaul to Windows 8 which promises to settle a considerable lot of the biggest complaints about the OS, these smaller-than-normal stores give Microsoft a stage to showcase the upgraded OS and the devices which run it, as well as the greater part of the Microsoft services. Microsoft could demonstrate how Skydrive, its distributed storage system, allows users to access files from the majority of their devices. The organization could push its Office 365 subscription, showing how documents might be accessed and altered from all devices seamlessly. The possibilities are endless.

Xbox One is, no doubt, positioned as a full home diversion solution instead of just a gaming gadget, and showcasing its abilities to consumers could give a boost to sales.

What this means for Best Buy

Best Buy has been decreasing the area it allows for low-margin items. Best Buy is the main national consumer electronics chain left, and thus provides a novel stage for Samsung and Microsoft to showcase their items.

One thing to recollect is that the normal Best Buy shopper likely isn't knowledgeable in technology. They haven't decided on what tablet to purchase before going to the store so the capacity to have products demonstrated and clarified by specially prepared associates makes Best Buy an appealing spot to shop. Also with Best Buy matching the prices of online competitors the show-staying impact should be minimized.

Individuals like to attempt gadgets before purchasing them, giving Best Buy a distinct preference over online retailers. The Microsoft arrangement is a huge endorsement of Best Buy's new strategy. Apple has had a little store presence for quite some time, yet the colossal Microsoft small scale stores alongside the Samsung smaller-than-usual stores may constrain Apple to stretch its presence inside Best Buy. This rivalry is useful for both consumers and Best Buy.

Reception of Windows telephone in the US has been slow; however, the Microsoft small stores will give consumers the chance to go for the devices firsthand. This is uplifting news for Nokia, as more exposure will probably prompt higher sales. The newest Lumia telephone, the Lumia 925, has gotten extraordinary reviews touting its remarkable Polaroid and sleek design, and this gives Nokia a true contender to top of the line Android phones. The telephone also features a metal shell, separating it from modest feeling phones produced using plastic.

Getting individuals to hold the Lumia 925 in their hands is the best route for Nokia to assemble awareness of the quality phones which the organization is making, and the Microsoft smaller-than-usual stores are the perfect venue for this.

Conclusion

The Microsoft smaller-than-expected stores are a positive for everybody included. Microsoft and Nokia will profit from the increased exposure as customers go for the devices, and prepared sales associates will have the capacity to tout the numerous features of Windows 8 and Windows telephone. For Best Buy, this arrangement validates its new strategy and fills the void left by uprooting a great part of the CD and DVD section of the stores. Best Buy is making strides towards turning into the chief destination for consumer electronics at the end of the day, and the steps are in the right heading.


Rating: 3.0/5 (1 vote)

Voters:

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK