Celebrating Microsoft's big day with a store opening and three new Get-a-Mac ads

Image: Apple Inc.

In the long running battle between Apple (AAPL) and Microsoft (MSFT), Thursday was a huge win for the boys from Redmond.

Windows 7 launched without a visible hitch and generated more positive reviews than we could count (a Google News search turned up 3,281, but we haven't read them all.)

Meanwhile, in Scottsdale, Ariz., the opening of the first Microsoft retail store delivered the kind of publicity coup money can't buy: customers camping out all night and a crowd the next morning estimated at 500.

Which brings us to our videos. The first shows Microsoft doing its best imitation of an Apple Store opening, complete with employees in multi-colored T-shirts hollering, clapping and giving high-fives.

The other three are Apple's response to all the hoopla: three snarky Get-a-Mac ads trying to turn the event into an opportunity to grab a few more points of market share.

Let's go to the videotape. More

Windows Mobile. Logo: Microsoft

At the end of a long report on the Apple Stores — and the corner he believes they have turned — Needham analyst Charles Wolf turned his attention this week to Microsoft (MSFT) and its plans to launch a fleet of company-branded stores of its own, complete with wall-sized digital screens, spaces for free public events and "Guru" bars to deal with customers’ software complaints.

Let's hope Steve Ballmer isn't on Needham's mailing list, because Wolf's two-page description of Microsoft's efforts and its products may be most dismissive ever produced by a Wall Street analyst. He even goes so far as to evoke the old lipstick joke that got Barack Obama in so much trouble with Sarah Palin during the primaries.

"Microsoft has always touted itself as an innovator," Wolf begins in a section entitled The Sincerest Form of Flattery. "But the company’s true genius has stemmed from its ability to copy the ideas of others."

And the company it's most fond of copying, he says, is Apple (AAPL).

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Apple's (AAPL) 258 retail stores may be drawing fewer visitors and bringing in less revenue than they did before the economic downturn (see stats below the fold), but they can still make a splash.

Witness the grand opening video — shot by No. 2 in line — of the company's 21st U.K. Apple Store in Brighton on Saturday, complete with the usual long snaking queue, 1,000 free T-shirts and over-the-top high-fiving Apple employees.

Below: the curious economics of Apple's retail stores.

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The new MacBooks are hot — and we're not talking about the lap-scorching temperature of their aluminum unibodies.

Apple's (AAPL) online store is currently showing a 7- to 10-day delay in shipping two models of the MacBook Pro — the high-end ($1,500) 13-inch and the entry-level ($1,700) 15-inch.

According to Piper Jaffray's Gene Munster, who tracks product lead times, Apple has never had a 7-10-day delay in the 13-inch MacBook — the one recently re-named the MacBook Pro. The most significant delay he's seen was a record 5-7 days, set more than two years ago.

In addition to the shipping delays, he says, some Apple retail stores are experiencing shortages of selected 13-inch MacBook Pros. Of the 10 stores his team contacted, seven were sold out of at least one 13-inch model.

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It's the reverse of Henry Ford's line about the Model T.  Today you can buy any iPhone you want, as long as it's not white.

Apple (AAPL) has been having trouble keeping the entry-level white iPhone in stock since the new 3GS went on sale two and a half weeks ago. But as of Tuesday morning, it has all but disappeared.

The 16 GB model — apparently the most popular — is out of stock in the 31 of the 41 states in which Apple has stores.

It's available in only one of California's 45 Apple Stores, 1 of 9 in Massachusetts, 1 of 7 in Illinois, 1 of 6 in Virginia and 1 of 3 New York City.

It's not clear whether demand for the white 16GB model is unusually high, or if Apple just isn’t making enough of them.

When we last looked at iPhone availability, there were red "sold out" lights for selected models in all but six states (see here). Today at least one model is out of stock in every state.

The only store in Delaware — located in Newark's Christiana Mall — is completely sold out.

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The iPhone availability widget is back — new and improved — and it's showing spot shortages of selected iPhones at Apple (AAPL) stores across the United States.

The availability tool, which appears on Apple's website in times of scarcity, was last seen in the summer of 2008, when demand for the iPhone 3G was heavy and supplies short.

When it reappeared on Friday, only 29 of Apple's 257 stores were displaying shortages of any iPhones, according to IFOAppleStore, a website that keeps close tabs of Apple's retail business.

By Sunday morning, however, there were red "sold out" lights for selected 3GS models in all but six states.

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Is there an Apple Store near you? Count yourself lucky, because the days of Apple's (AAPL) aggressive expansion into the branded retail space are over — at least for now.

After opening more than 250 company-owned stores in eight years — an average of nearly 8 per quarter and a total of 46 in 2008 alone — Apple in the last quarter opened just one.

The building slowdown is one of several moves that Apple has made in response to what COO Tim Cook this week called a "horrendous economy."

Although Apple's revenues grew more than 8% year over year in its second fiscal quarter, the average take per store took a 17% hit, falling to $5.9 million from $7.1 million in 2008.

So Apple has been cutting back. According to its latest SEC 10-Q filing, the company has slashed the ranks of its retail employees — from the equivalent of 15,600 full-time workers at the end of its December quarter to 14,000 in March, a net loss of 1,600 jobs.

It has also been closing stores — temporarily, for renovations — at a stepped up pace. IFOAppleStore, the definitive source for news of Apple Store openings, has been reporting round after round of retrofits. The latest cycle calls for stores to be temporarily closed in Tigard, Ore., Woodland, Mich., and White Plains, N.Y.

As its SEC filing notes, Apple-owned stores requires a "substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel, and other operating expenses. … The Company would incur substantial costs if it were to close multiple retail stores."

That doesn't necessarily mean Apple plans to shutter a lot of stores, but it could signal a major reassessment of its retail strategy.

"I believe Apple is at a dangerous crossroads with retail and must make very careful decisions here," writes a retail management expert who posts on Investor Village's AAPL Sanity board under the handle nontekkie. Although he believes Apple is doing the right thing, he also sounds a warning:

"And as sales drop, expenses must be cut. So Apple faces the conundrum of cutting payroll and risking the service part of their reputation because they have sent the sales portion of their product to Best Buy, Wal Mart, AT&T, etc etc. The product gains wider distribution, the customer gains convenience, but Apple risks running stores in the red or losing their service strength.

"Apple retail stores… are not meant to saturate a market, they need to be a destination." (link)

During Wednesday's conference call, CFO Peter Oppenheimer said the company was still on track to open 25 stores in fiscal 2009. But he added that about half of those stores are overseas. If he's counting the 6 U.S. stores that have opened since Sept. 27, 2008, Apple could be planning to open as few as 6 new domestic branches before the end of fiscal 2009.

To get a feel for what it means to Apple's customers for the company to open a new store in their city — and what a loss it would be for them if Apple's expansion were to slow or stop –  check these out:

• Apple’s Munich opening is mobbed — in fullscreen panorama
• ‘Absolutely mental’: Apple launches first Irish store
• Video: High fives and hype at Boston’s new Apple Store

UPDATE: MacWorld's Dan Moran shed some light on the full-time equivalent numbers in an article posted Monday. Among other things, he tracks the number of Apple retail employees going back to Q1 2006. Here's his chart:

Bottom line: Apple may not have laid off 10% of its retail workforce, as Moran initially reported, but it has definitely cut back the hours they work.

It took five tries — and four redesigns –  but Apple (AAPL) last week finally won approval to build a retail outlet in Washington D.C., its first in the nation's capital.

The final rendering, shown at right, was designed to echo the architectural features of the city's historic Georgetown neighborhood. It was enthusiastically embraced by the same architectural preservation board that had soundly rejected Apple's previous designs.

"This is beautifully executed," Stephen J. Vanze, chairman of the Old Georgetown Board, told Karl Backus, Apple's architect, according to the Washington Post. "We're very pleased."

The Post did not say if Steve Jobs is equally pleased. Apple purchased the building that now stands on the site, 1229 Wisconsin Ave. NW, in 2007 for $13.3 million, according to IFOAppleStore. It has been navigating the maze of D.C.'s multi-layered approval process ever since.

For a company that puts so much stock in cutting-edge design, it must have been painful to be second-guessed at every turn by a couple of neighborhood boards.

How far is the final version from Apple's original conception? We tell the story through pictures below the fold. More

New Yorkers know better, especially these days, than to expect any sympathy from the rest of the country — even though the city, with three Apple Stores for a population of more than 8 million, is conspicuously underserved by the company's retail outlets. (San Francisco's three stores, by contrast, serve a population of fewer than 800,000.)

But what about Brooklyn? The most populous of the five boroughs (pop. 2.5 million) would be, as any cabbie can tell you, the fourth largest city in the United States if it weren't yoked to Manhattan, Queens and the rest. It is home to tens of thousands of Mac users of every stripe — teachers, students, writers, artists, designers, musicians, mobsters — yet it has zero Apple Stores.

Which is why Brooklynites get so excited when there is any news, as there was this week, about Apple putting an outlet in their borough.

At a real estate roundtable on Tuesday, the developer of a huge condominium project on the Brooklyn side of the East River announced that an Apple Store was a "real possibility" for one of its prime ground floor retail spaces.

"There's no deal," developer Jeff Levine told the audience, according to the website Brownstoner. "But we are talking and they are interested."

The site in question is the Williamsburg Edge, a 575-apartment complex still under construction with two blue-glass towers and million-dollar views of the Manhattan skyline.

Sounds cool, huh? The problem for the rest of Brooklyn is that the Edge is on the edge of nowhere, with water on one side and Williamsburg on the other — a crazy quilt of ethnic enclaves teeming with Germans, Hasidic Jews, Italians, Puerto Ricans, Dominicans and, most recently, artists and indie musicians fleeing Manhattan's exorbitant rents. There is only one subway — the crowded L line — and it connects Williamsburg to Manhattan, not to the main thoroughfares of Brooklyn.

Levine's claim — true or not — reignited the fierce internecine rivalry among Brooklyn neighborhoods that broke out a year and a half ago when word first spread, via ifoAppleStore, that Apple was shopping for a Kings County location. The pros and cons of some of the contending sites were summarized at the time by a local website called Racked.

For the benefit of my neighbors and any scouts from Apple's (AAPL) retail division who might be reading this, I've excerpted Racked's handicapping and a few of the comments. But because none of this will mean anything to the rest of the world, I've put it below the fold.

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How do these rumors get started? Or, more to the point, how do they get perpetuated?

Late Thursday, a site called tinycomb ("Hand-Picked Tech News") reported that Facebook had been banned "for life" from every Apple (AAPL) store in the United States — some 207 retail outlets in all, by my count.

This must have been one of those facts that was too good to check, because I'm pretty sure none of the half-dozen newspapers and blogs that repeated and embellished the story bothered to do any legwork to confirm it.

It certainly seems that most of the readers who applauded the reported ban — a couple dozen at tinycomb, nearly 40 at Digg, more than 120 at MacRumors — took it as fact.

"Why has this been kept under the radar?" asked SherwinNero at tinycomb.

"Has it really been kept under the radar," answered Max, "or was it considered 'not significant enough' to put it on the front pages everywhere?"

Or is, just possibly, not true?

I know from experience that some Apple stores put limits on where on the Web you can take their demo machines — sometimes restricting Safari to Apple's promotional pages.

And it's certainly possible that individual stores have blocked Facebook — as MySpace has been blocked since May 2007 — because some of its members were hogging the machines.

Indeed, Ars Technica quotes an unnamed Apple employee who says his store has been blocking Facebook for about a month.

"It's just trying to find a balance between letting people try out the computers, but not tying them up so others can try them as well," he told Ars. (link)

But a person at Apple headquarters  in a position to know assures me that there is no nationwide ban on Facebook in effect — permanent or otherwise.

I'm headed to the nearest Apple store to check it out. If you're in one now, let us know in the comment stream where you are and whether the demo machine you're using will let you get to your Facebook page.

UPDATE: CNET's Caroline McCarthy beat me to it, did the legwork, and confirmed that Facebook is accessible at all three Manhattan Apple Stores, although as suspected there are individual machines in those stores that will redirect you to an Apple Store page. See here.