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Wednesday, August 31, 2005, 06:00 am PT (09:00 am ET)

Microsoft eyes retail space in Times Square

Faced with the undeniable success of Apple's retail store strategy, Microsoft is reportedly prepping its own retail boutiques, the first of which may turn up in the heart of New York City.

A report published Monday by  The New York Post indicates that Microsoft is hunting for a location in world-famous Times Square for its first store. The company is said to be seeking a large space to showcase its products, which range from the Windows franchise to the gaming behemoth Xbox.

But Microsoft isn't looking to rent just any Times Square space, according to the report. Microsoft is said to be eyeing a location at 1, Times Square, the building famed as the backdrop to the New Year's Eve celebrations, including the New Year's Eve ball drop.

What is unclear is whether the company's initiative to secure a New York store is a precursor to a larger strategy for a retail presence. In the late 1990s, the software giant launched MicrosoftSF, a major San Francisco outfit to showcase its latest products. The store closed shop a mere three years later.

If the reports are accurate, Microsoft is again pinning its hopes on a high-visibility storefront — this time with the aim of regaining public mind-share now thought to have been captured by Apple. "They are not going to let Apple take that environment," Marshal Cohen, chief analyst at NPD Group, told Post reporter Louise Kramer.

Apple currently operates 120 retail stores worldwide, and intends to close out fiscal 2005 with 125 stores. The company will soon operate four locations in New York City, as evidenced by job listings and retail sources.

To much fanfare, in 2002 Apple launched its first New York City location in downtown trendy SoHo. The company now plans an extensive new outfit in Midtown Manhattan that sources say will upstage SoHo as Apple's premier New York flagship location. The company also holds plans for stores in the New York City borough of Staten Island, as well as the Flatiron district of Manhattan — both of which could  open later this year.

"The Apple store has succeeded beyond their wildest dreams," said Marianne Wilson, senior editor of Chain Store Age to the The Post.

Most notably, Apple's stores reached $1 billion in sales faster than any other retail chain in history. Microsoft is likely to try and duplicate that success.