* First Paris store to open Nov. 7
* More due in Paris, Montpellier 2009/10
* Seen mainly as marketing tool by analysts
By Lionel Laurent
PARIS, Nov 6 (Reuters Life!) - Computer giant Apple Inc
(AAPL.O) will open its first French store beneath the Louvre
museum on Saturday just two weeks after Microsoft (MSFT.O)
opened a theme cafe to promote its Windows 7 software.
Although Microsoft had a head start promoting its new
Windows operating system in France, Apple has placed its first
store in a prized position in the bowels of the Louvre museum's
"Carrousel" shopping centre.
Both companies have large operations in France, according to
Paul Jackson, an analyst with Forrester Research, but he said
Apple in particular was looking to burnish its premium image
with its new Paris site.
"It's more to do with the feeling of association with
premium shopping than necessarily the market itself," said
Jackson. He said France as a technology market tended to lag
behind Britain and Germany, which already have Apple stores.
Apple's French expansion will take place against an
uncertain economic background, with consumer spending in France
still volatile and supported by government measures such as the
car scrappage scheme.
But spending on must-have gadgets such as the Apple iPhone
has proven robust. France Telecom FTE.PA has sold 1.3 million
iPhones between November 2007 and September 2009, while new
entrants SFR and Bouygues Telecom have sold around 200,000
iPhones since France Telecom lost exclusivity in spring.
"We are highly confident in the French consumer," Apple's
head of retail, Ron Johnson, told Reuters at an event in Paris
to launch the store.
When asked whether Apple felt any pressure from Microsoft's
Windows 7 Cafe, which opened its doors on Oct. 22, Johnson
replied: "I think our store competes very well."
The Microsoft cafe, on Rue Sebastopol, does not actually
sell any Microsoft products. It sells drinks and food and offers
the chance to try out Microsoft's new Windows system, available
ready bundled with new PCs or via upgrade.
A spokeswoman for Microsoft said the cafe would be open
until the end of the year, with the possibility of keeping it
open an extra few months into 2010.
Analysts say Apple may not suffer much from Microsoft's
buzz, largely because iconic gadgets such as the iPod and iPhone
have a "cool factor" that Microsoft software lacks.
"Microsoft has been lumbered with this image of being a
global giant which keeps getting things wrong," said Robert
Gregory, an analyst at research firm Planet Retail.
Apple launched its chain of retail stores in 2001 and now
runs 273 stores around the world.
Microsoft recently followed suit and opened its first retail
outlet in Arizona, with a second planned for California. It is
Microsoft's second attempt at the retail business after a brief
experiment with Sony Corp (6758.T) in San Francisco's Metreon
centre a decade ago.
Analysts say these branded retail outlets are more marketing
tools than growing sources of profit.
Planet Retail's Gregory said Apple's British operations,
including its London store on Regent Street, made a loss in 2008
and might just break even this year, according to data from
Apple does not officially break down results by country. In
its most recent quarter, Apple stores generated $1.9 billion in
revenue worldwide, the highest level ever.
"The main source of money for Apple and similar players are
starting to come mainly from the online world than actually from
the stores," said Saverio Romeo, an analyst with consultants
Frost & Sullivan.
He cited Apple's recent announcement of over 2 billion
downloads from its online application store. "It's a promising
revenue stream, considering that it's just one year old."
(Additional reporting by Marie Mawad in Paris and Gabriel
Madway in San Francisco; Editing by Marcel Michelson and Paul