Will London be the venue for Microsoft's European flagship store?

The company is examining potential sites for its first shops outside of the US.

Microsoft is planning to expand its retail business beyond North America and, according to The Financial Times, has been holding talks with property landlords in the UK with the hopes of opening a flagship European store before the end of 2013, most probably in London. However, according to a source close to the discussions, no decision will be made until Microsoft has assessed the performance of its existing stores.

The company currently has 32 stores -- 30 in the US plus 1 store each in Canada and Puerto Rico -- but has ambitious plans to more than double the number over the next three years. However, if Microsoft hopes to emulate Apple's success as a hardware and software business, it needs more retail outlets beyond the US and in other mature technology markets, not just to sell its products, but to showcase them and the Microsoft brand to the public at large.

As Microsoft's own products (with the exception of the Xbox) are only available through Microsoft's US retail chain or via its website, customers in Europe and beyond don't currently have the opportunity to ‘try before they buy'. This could be one of the reasons why Microsoft's first tablet computer, the Surface RT has so far failed to capture the public's imagination, especially considering the growing practice of showrooming' -- the trend of using a smartphone to compare the price of an item in a shop with the price of the same item online, or using a physical store to make an up-close examination of an item before buying it (usually online). In the case of Microsoft products, all that many have to go on is the advertising campaign and reviews by tech sites and gadget magazines in order to make an informed decision.