Microsoft has confirmed its rumored plan to open what it describes as its “first flagship store” on Manhattan’s Fifth Avenue, a few blocks away from Apple’s glass-cubed flagship store, reports the WSJ.

“As our first flagship store, it will serve as the centerpiece of our Microsoft Stores experience,” said David Porter, corporate vice president for Microsoft retail stores. “This is a goal we’ve had since day one—we were only waiting for the right location. And now we have it.”

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Microsoft started opening its own stores in 2009, some eight years after Apple opened its first retail store in McLean, Virginia. Microsoft currently has 104 stores across the USA, Canada and Puerto Rico, selling laptops, smartphones, Surface tablets, Xbox consoles and accessories.

The store will be located at 677 Fifth Avenue, currently a Fendi outlet. Presumably the company is hoping it might sell a few Surface tablets to help offset the $1.7B loss it has made on the device, despite its series of misleading ads attacking both the iPad (and iPad mini) and MacBook Air

NYMag also has an interesting piece today on the story behind Apple’s famous glass cube, a clever way of transforming a ‘useless’ basement space into one of the most famous stores in the world.

Steve Jobs apparently wanted a 40-foot cube, which the owner of the property, Harry Macklowe, felt would be too large. Having got to know Steve over numerous conversations, he decided that it would be pointless trying to change his mind. He instead decided on a demonstration.

He invited Apple’s retail development executives, Ron Johnson and Robert “Rob” Briger, to the building two weeks after the Cupertino meeting, to view a scaffolding mock‐up of the cube — in the dead of night. (Regulations forbade Macklowe to build during the day.)

Around two in the morning, the group met in front of the GM Building. The 40‐foot cube was unveiled. They all agreed it was too big. It obscured the building. Macklowe was grinning. He then gave the signal, and the model was dismantled — only to reveal a 30‐foot cube he had secretly constructed underneath.

His magic trick worked. Apple was sold on the smaller cube.

Macklowe said that he was getting so many calls from Steve that he felt they were becoming friends, and the property developer offered Steve a NY office in the GM building behind the Plaza. Steve refused.

When I come to New York, I want to be in Soho. I want to be in Chelsea. I want to be surrounded by young people … I can listen to what they’re thinking. I want to have new ideas.

Macklowe also revealed that part of the deal included a percentage of the store’s sales – but as even Apple had no idea what to expect from the store, he opted for most of the rent in cash with only a tiny percentage – or ‘stop.’

Apple really had no idea what this store was going to do in business per year, and we negotiated the ‘stop’ at a level that turned out to be horrendously low. The first year they made a million dollars a day.

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