Houston, We Have an Xbox: Microsoft Opens 10th Store

Microsoft took another step in its slow climb to compete with Apple today as the software giant opened store number 10 in Houston, TX. Microsoft will keep its enemy close and share the same mall space with an Apple store inside Houston’s Galleria Mall.

To lure in Houston customers, Microsoft partnered with pop superstar Kelly Clarkson. The first 100 people who visit the store today will receive two tickets to see the American Idol winner perform in the mall on Saturday June 25 and one VIP pass to meet Clarkson after the show. The next 1,100 customers in line will each receive two tickets to the June 25 performance, and additional general admission tickets will be given out one-per-person while supplies last.

Microsoft CEO Steve Ballmer and his top lieutenants have been bullish on stores despite Apple’s dominance and the financial risks inherent in retail. Microsoft has been in the retail game since Oct. 2009 when its first store opened in Scottsdale, AZ. Ten stores in 20 months is not a blistering pace, which makes you wonder how much profit Microsoft stores are generating. After all, Microsoft’s products – Windows 7 PCs, Xbox Kinect, Windows Phone 7 and other products – are available at the same price at other venues such as Best Buy, and there are a heck of a lot more Best Buys than Microsoft stores.

Nevertheless, the reward appears to be worth the risk for Microsoft. The company is clearly investing heavily in retail this year with a store opening in Costa Mesa, Calif. last March, an Atlanta store in May and the Houston store today. A Los Angeles store is planned for this month, and stores in Seattle, New York City and Orlando are also reportedly set to open in 2011.

Microsoft needs all the retail stores it can build to keep its crucially important Windows Phone 7 from being swallowed up by more popular Android phones, iPhones and BlackBerrys on shelves at AT&T and Verizon stores. The same goes for Microsoft’s slowly gestating Windows tablets, set to arrive in full with the next version of Windows in the second half of 2012.

To that end, it is noteworthy that Microsoft stores reached double digits today in Houston, with more growth and investment on the way.

And though it may be financially impractical to open stores at Apple’s pace (Apple has 222 stores in the U.S.), Ballmer and company are still eager to do it. I, for one, would love to see Microsoft stores increase ten-fold just to give Apple and Best Buy some good old-fashioned competition.