UPDATE 1-Microsoft to open Windows stores within Best Buy

Thu Jun 13, 2013 1:02pm EDT

By Bill Rigby

SEATTLE, June 13 (Reuters) - Microsoft Corp said it would open 500 special stores within existing Best Buy Co Inc stores in the United States selling exclusively Windows-based tablets and computers and other Microsoft products in an effort to revitalize sales of its flagship operating system.

The world's largest software company, which already has a chain of 70 or so of its own Microsoft Stores and kiosks within shopping malls, said on Thursday the initiative would add more than 1,200 Best Buy Microsoft-trained sales associates to help customers.

Microsoft's new Windows 8 operating system has sold more than 100 million copies since launch in October, but sales of new tablets and PCs running the software, and its own Surface tablet, have not been as strong as it hoped. An updated version called Windows 8.1 is scheduled for release later this year.

Part of the problem has been that Microsoft has struggled to get the attention of shoppers at large retailers such as Best Buy due to the profusion and popularity of Apple Inc's iPad and tablets running Google Inc's Android system.

The new store-within-a-store approach "offers a large-scale, hands-on customer experience" of Microsoft products, said Tami Reller, head of marketing at Microsoft's Windows unit.

Microsoft's plan comes just two months after Samsung Electronics also unveiled plans to install its brand shops in more than 1,400 Best Buy stores this year.

The store-within-a-store effort is a key plank of Best Buy's turnaround plan, which includes dedicating more space to more-profitable products like tablets and mobile phones.

Best Buy, the world's largest consumer electronics chain, has also been trying to use its clout with suppliers to fight online and discount rivals and boost in-store traffic, sales and profitability.

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