www.apple.com/ipod/start

Apple does not officially break down results by country. In its most recent quarter, Apple stores generated $1.9 billion in revenue worldwide, the highest level ever.

Analysts say these branded retail outlets are more marketing tools than growing sources of profit.

Planet Retail’s Gregory said Apple’s British operations, including its London store on Regent Street, made a loss in 2008 and might just break even this year, according to data from Companies House.

Analysts say these branded retail outlets are more marketing tools than growing sources of profit.

Planet Retail’s Gregory said Apple’s British operations, including its London store on Regent Street, made a loss in 2008 and might just break even this year, according to data from Companies House.

“The main source of money for Apple and similar players are starting to come mainly from the online world than actually from the stores,” said Saverio Romeo, an analyst with consultants Frost & Sullivan.

He cited Apple’s recent announcement of over 2 billion downloads from its online application store. “It’s a promising revenue stream, considering that it’s just one year old.”

Computer giant Apple Inc will open its first French store beneath the Louvre museum on Saturday just two weeks after Microsoft opened a theme cafe to promote its Windows 7 software.

Although Microsoft had a head start promoting its new Windows operating system in France, Apple has placed its first store in a prized position in the bowels of the Louvre museum’s “Carrousel” shopping center.

Both companies have large operations in France, according to Paul Jackson, an analyst with Forrester Research, but he said Apple in particular was looking to burnish its premium image with its new Paris site.

“It’s more to do with the feeling of association with premium shopping than necessarily the market itself,” said Jackson. He said France as a technology market tended to lag behind Britain and Germany, which already have Apple stores.

Apple’s French expansion will take place against an uncertain economic background, with consumer spending in France still volatile and supported by government measures such as the car scrappage scheme.

But spending on must-have gadgets such as the Apple iPhone has proven robust. France Telecom has sold 1.3 million iPhones between November 2007 and September 2009, while new entrants SFR and Bouygues Telecom have sold around 200,000 iPhones since France Telecom lost exclusivity in spring.

“We are highly confident in the French consumer,” Apple’s head of retail, Ron Johnson, told Reuters at an event in Paris to launch the store.

MICROSOFT CHALLENGE

When asked whether Apple felt any pressure from Microsoft’s Windows 7 Cafe, which opened its doors on October 22, Johnson replied: “I think our store competes very well.”

The Microsoft cafe, on Rue Sebastopol, does not actually sell any Microsoft products. It sells drinks and food and offers the chance to try out Microsoft’s new Windows system, available ready bundled with new PCs or via upgrade.

A spokeswoman for Microsoft said the cafe would be open until the end of the year, with the possibility of keeping it open an extra few months into 2010.

Analysts say Apple may not suffer much from Microsoft’s buzz, largely because iconic gadgets such as the iPod and iPhone have a “cool factor” that Microsoft software lacks.

“Microsoft has been lumbered with this image of being a global giant which keeps getting things wrong,” said Robert Gregory, an analyst at research firm Planet Retail.

Apple launched its chain of retail stores in 2001 and now runs 273 stores around the world.

Microsoft recently followed suit and opened its first retail outlet in Arizona, with a second planned for California. It is Microsoft’s second attempt at the retail business after a brief experiment with Sony Corp in San Francisco’s Metreon center a decade ago

Following the success of Apple’s App Store, other mobile platform vendors such as Google and Research In Motion (RIM) have launched similar services, through which individual developers can promote applications they build specifically for each platform while consumers can choose from thousands of applications tailored for their needs.

Over two billion applications have been downloaded from the App Store since it opened in July last year, “continuing to make it the world’s most popular applications store,” Apple said.

According to Apple, its App Store now has 20 categories, including games, business, news, sports, health, reference and travel.

Wednesday announced that over 100,000 applications now are available in its App Store, an online service for the company’s iPhone and iPod touch media player.

“The App Store, now with over 100,000 applications available, is clearly a major differentiator for millions of iPhone and iPod touch customers around the world,” Philip Schiller, Apple’s senior vice president of worldwide product marketing, said in a statement.

New numbers of applications and downloads showed the popularity of Apple’s service, largest of its kind in the world, among developers and users.

Sony’s new online service connecting the whole range of its gadgets to downloadable content like movies and games should help build brand loyalty, a top executive said Friday.

Executive Vice President Kazuo Hirai said the service, set for launch next year, highlights an advantage that Sony has over rivals like Samsung Electronics Co. and other manufacturers that don’t produce their own content. Sony’s business empire spans gaming, electronics, movies and music.

“That’s the kind of combination that I think is not seen anywhere else,” Hirai said in an interview at Tokyo headquarters. “That I think is where our core competence lies, and that’s a differentiator for Sony.”

Hirai said the planned service was a chance to one-up rivals at a time when products are becoming commodities, with prices being the big way to compete.

“We want to increase the value, or the brand loyalty of our Sony products. There is no question about it,” he said.

Sony has a long way to go before a full recovery.

The maker of the Walkman portable player expects a 95 billion yen ($1 billion) loss for the fiscal year through March 2010 — marginally better than the 98.9 billion yen loss the previous fiscal year, its first annual loss in 14 years.

The online service will include games, movie downloads and other interactive entertainment, which will be accessible on Sony products, such as Bravia TVs, Cyber-shot digital cameras and Reader electronic books.

But Kazuharu Miura, analyst with Daiwa Securities SMBC in Tokyo, said it was unclear whether online services will boost gadget sales.

“I understand what Sony is trying to do, and that’s the best way to showcase its strengths,” he said. “But whether that will really get people to buy a Sony camera or a Vaio computer all depends on what Sony does with the online service.”

Hirai said Sony already offers streaming video, comic delivery and a news service, but could expand into any of the gamut of services available for personal computers, such as fitness and financial services.

Sony is targeting annual sales of 300 billion yen ($3.4 billion) from its networked services businesses and 350 million network-connected products by the fiscal year ending March 2013.

Sony’s service for PlayStation 3 video game machines, which began three years ago, has attracted 33 million users. The new service will be expanded to other Sony products.

In outlining a turnaround strategy Thursday, Chief Executive Howard Stringer flagged network services as a major area where Sony hopes to grow, as well as 3-D TVs, new displays, electronic books and batteries for cars.

Sony is expecting its second straight annual loss for the fiscal year through March 2010 — hurt by sliding prices, the global slowdown and the absence of blockbusters products like Apple Inc.’s iPod or Nintendo Co.’s Wii.

It has fallen behind in liquid-crystal display TVs to Samsung of South Korea and Japanese rival Sharp Corp. Sony is hoping to be profitable in that business by the fiscal year ending March 2011.

Hirai, who oversees games and network services, acknowledged Sony’s units didn’t communicate well in the past to coordinate their strengths.

That has changed under Stringer, he said. Stringer appointed a new management team earlier this year, including Hirai.

 

Apple Inc has reserved space in late January at a venue in San Francisco in advance of a planned product announcement, the Financial Times reported on its blog on Wednesday.

Apple used the Yerba Buena Center last September when it hosted an iPod event that featured the first public appearance by Chief Executive Steve Jobs following his return from medical leave.

Shares of Apple closed up $1.74, or 0.9 percent, at $202.10 on the Nasdaq on Wednesday.

The company has rented a stage at the Yerba Buena Center for the Arts and is expected to make a “major product announcement” on Tuesday, January 26, the report said, citing people familiar with the plans.

Shoppers walk near the Apple Store on Market Street during the holiday shopping season in San Francisco, California December 23, 2009. (REUTERS/Robert Galbraith)

Apple declined to comment. The Yerba Buena Center could not immediately be reached for comment

The report comes amid mounting excitement about Apple’s rumored plans to release a tablet computer. Apple has never confirmed the existence of the device — which is said to resemble a larger iPhone or iPod touch — but speculation has been rampant for months.

The FT report did not say whether Apple planned to unveil the tablet at the January event, but some analysts believe the company will launch the device in the spring, possibly in March.

A few weeks ago, Pasquale Castaldo was waiting at the Dallas-Fort Worth airport for a delayed flight, when a man sitting across from him pulled out an Amazon Kindle book-reading device.

Bob LiVolsi, the founder and CEO of independent e-book retailer BooksOnBoard, said two-thirds of his customers read their books on their PCs. Romance, thriller and mystery titles costing $5 to $7 are the big draw for his customers, who aren’t high earners and have trouble justifying the cost of a dedicated device.

He’s even signed up for The Daily Lit, a service that sends out books in e-mail every day, broken up into chunks that take about five minutes to read on a BlackBerry or computer screen.

Though adoption has been slow, PCs have had a big head start in e-books, said Michael Norris, senior publishing analyst at Simba. Their ubiquity also means they provide some camouflage to avid readers who want to “read a romance novel at work while pretending to work,” he said.

Robert Lisi, a construction estimator in Charleston, S.C., reads on his BlackBerry when he doesn’t have his Sony Reader handy.

“I have books on tape, and then I have books on paper and as e-books,” Lisi said. “I want to get to where I’m reading a book a week, but I work, so I can’t do that.”

“Gee, maybe I should think about e-books myself,” Castaldo thought.

He didn’t have a Kindle, but he did have a BlackBerry. He pulled it out and looked for available applications. Sure enough, Barnes & Noble Inc. had just put up an e-reading program. Castaldo, 54, downloaded it, and within a minute, began reading Jane Austen’s “Pride and Prejudice.”

As others are also discovering, the North Haven, Conn., banker found e-books quite accessible without a Kindle.

“The BlackBerry is always with me,” Castaldo said. “Rather than just sitting there, if I can fill that time by reading a good book, I might do that, in addition to doing the other things I might do, like reading e-mail and Twittering.”

Thanks to Amazon.com Inc.’s Kindle, e-book sales are finally zooming, after more than a decade in the doldrums.

But the pioneering device may not dominate the market for long. As Castaldo found, many phones are now sophisticated enough, and have good enough screens, to be used as e-book reading devices. In addition, e-book reading on computers is already surprisingly popular.

E-book sales reported to the Association of American Publishers have been rising sharply since the beginning of 2008, just after the release of the Kindle. It’s the best sustained growth the industry has seen since the International Digital Publishing Forum began tracking sales in 2002 — a sign that e-books finally could be about to break into the mainstream.

U.S. trade e-book sales in the April to June period this year more than tripled from the amount a year ago, as reported by about a dozen publishers.

Total reported sales at wholesale prices were $37.6 million. That’s less than 2 percent of the overall book market, but the number understates e-book sales, because not all publishers contribute to the report. The figure also excludes textbooks, an area where e-books have made substantial inroads.

While other digital media like CDs, DVDs and MP3 songs showed sharp growth rates from the get-go, e-books have puttered around as a tiny fraction of overall book sales for more than a decade. In several periods, sales actually declined from year to year as publishers wavered in their commitment and interest.

The technology has also faced unique resistance from consumers because printed books work so well.

The most well-known dedicated reading devices, the Kindle and Sony Corp.’s Reader, try to emulate the look of the printed page with a display technology known as “electronic ink.”

While many find the result pleasant to read, e-ink also imposes significant limitations on the devices. They can’t be backlit like other screens. They can’t show color. They’re also slow to update, making them difficult to use for Web browsing or other computer activities.

The Kindle has a wireless connection directly to Amazon’s store, meaning users can buy and download books to the device within minutes, much like Castaldo could do on his smart phone. The Reader lacks a wireless capability and thus needs to be connected to a computer to load books.

Amazon isn’t betting solely on the Kindle. It released an iPhone app for the Kindle store in March. It has snapped up some other developers of book-reading applications for smart phones, but these programs don’t use the Kindle store.

Shanna Vaughn, a university worker and voracious reader in Orange County, Calif., has been reading e-books on a computer or handheld organizer for at least ten years, but it was only an occasional habit until she got an iPhone last year. It’s mainly the convenience that’s winning her over: Because Vaughn can buy and download books nearly instantly to the phone, she doesn’t need to plan a trip to the book store.

Vaughn, 35, is not interested in a Kindle or a Reader.

“I never really wanted something that was a single-function device. I just couldn’t see spending … $300 for a device where I’m sort of locked in to one retailer. Whereas my phone, that does everything.”

Forrester Research analyst Sarah Rotman Epps said that while the Kindle has sparked interest in e-books, downloads of e-reading applications for smart phones have far outnumbered the Kindles sold.

The Stanza app for the iPhone and the iPod Touch, for instance, has been downloaded more than 2 million times since last summer, compared with Rotman Epps’ estimate of more than 900,000 Kindles sold through the first quarter of this year. (Lexcycle Inc., the maker of Stanza, was acquired in April by Amazon, which does not disclose Kindle sales.)

“There will be a market for dedicated reading devices, but there’s potentially an even bigger market for reading on devices that people already own, like smart phones,” she said.

According to a survey of 2,600 adults by research firm Simba Information this spring, the most common way to read e-books is on another general-purpose device: the personal computer. It found that 8 percent of adults had bought an e-book last year, a high figure considering that Kindle sales were less than half a percent of the adult population.

Sony Corp. employee Rumi Yamaguchi looks at Sony Walkman products including the first Walksman, top shelf, second from left, at a special display that opens Wednesday, July 1, 2009, commemorating the handy music player’s 30th anniversary at Sony Archive building in Tokyo, Japan. (AP Photo/Shuji Kajiyama)

When the Sony Walkman went on sale 30 years ago, it was shown off by a skateboarder to illustrate how the portable cassette-tape player delivered music on-the-go — a totally innovative idea back in 1979.

Today, Sony Corp. is struggling to reinvent itself and win back its reputation as a pioneer of razzle-dazzle gadgetry once exemplified in the Walkman, which Wednesday had its 30th anniversary marked with a special display at Sony’s corporate archives.

The Japanese electronics and entertainment company lost 98.9 billion yen ($1.02 billion) in the fiscal year ended March — its first annual loss in 14 years — and is expecting more red ink this year.

The manufacturer, which also makes Vaio personal computers and Cyber-shot cameras, hasn’t had a decisive hit like the Walkman for years, and has taken a battering in the portable music player market to Apple Inc.’s iPod.

Sony has sold 385 million Walkman machines worldwide in 30 years as it evolved from playing cassettes to compact disks then minidisks — a smaller version of the CD — and finally digital files. Apple has sold more than 210 million iPod machines worldwide in eight years.

There is even some speculation in the Japanese media that Sony should drop the Walkman brand — a name associated with Sony’s rise from its humble beginnings in 1946 with just 20 employees to one of the first Japanese companies to successfully go global.

“The Walkman’s gap with the iPod has grown so definitive, it would be extremely difficult for Sony to catch up, even if it were to start from scratch to try to boost market share,” said Kazuharu Miura, analyst with Daiwa Institute of Research in Tokyo.

Miura believes Sony can hope to be unique with its PlayStation 3 and PlayStation Portable video game consoles, but it has yet to offer outstanding electronics products that exploit such strengths.

In a special display at Tokyo’s Sony Archive building, opening Wednesday to commemorate the Walkman’s 30-year history, an impassioned Akio Morita, Sony’s co-founder, speaks to employees in a 1989 video to celebrate the 10th anniversary of the Walkman.

“We can deliver a totally new kind of thrill to people with the Walkman,” said the silver-haired Morita, proudly wearing a gray factory-worker jacket and surrounding himself with dozens of colorful Walkman machines. “We must make more and more products like the Walkman.”

Morita acknowledges in the video that the Walkman doesn’t feature any groundbreaking technology but merely repackaged old ones — but did so in a nifty creative way. And it started with a small simple idea — enjoying music anywhere, without bothering people around you.

The original Walkman was as big as a paperback book, and weighed 390 grams (14 ounces). It wasn’t cheap, especially for those days, costing 33,000 yen ($340).

But people snatched it up.

Other names were initially tried for international markets like “soundabout” and “stowaway.” Sony soon settled on Walkman. The original logo had little feet on the A’s in “WALKMAN.”

Micron’s and Intel’s latest technology supports ONFI 2.0. In addition, future high-speed SSDs developed by the companies also will support USB 3.0, which is considerably faster than current USB 2.0 ports commonly used in computers today, and PCI express, which is the specification for slots on a motherboard where peripherals, such as graphics cards, is attached.

Intel and Micron Technology have developed technology for a high-speed solid-state drive that’s five times faster than current products used in consumer and professional devices, like notebooks and digital cameras, media reported Saturday.  

The NAND flash memory chips developed jointly by the two companies can reach speeds of up to 200 MB per second for reading data and 100 MB per second for writing data. Current memory chips have maximum read-write speeds of 40 MB and 20 MB, respectively.

Current technology is fast enough for handling photos and standard video in computers or an Apple iPod, but performance problems become an issue in handling high-definition video, which consumers are expected to start demanding as they become accustomed to watching HD televisions.

 With HD video files requiring multiple gigabytes of storage, the need for technology that can move the content in and out of a storage device quickly, so it can be played on a handheld gadget or recorded in a camcorder, becomes critical.

“These are all areas where performance does matter and consumers or users are willing to pay for it,” analyst Joe Unsworth said. “These products are going to have a premium associated with it.”

“We don’t expect this high-performance NAND [flash memory] to be widespread,” Unsworth said. “But when you’re talking video and professional photography, companies are willing to pay that premium to have that performance [in products].

(FilePhoto)

 With Cisco’s lawsuit against Apple still remaining pending, the two companies have agreed to give more time to Apple before it going to respond in court.

Cisco makes routers and switches to link networks and power the Internet. It has owned the trademark on the name “iPhone” since 2000. In the spring of 2006, it began shipping its own line of iPhone-branded Internet-enabled phones.

 Apple Inc. and Cisco Systems Inc. are stopping their lawsuits over the iPhone and could go back to solve the issue through negotiations, according to media reports Friday.

They will now negotiate matters including trademark rights and interoperability, the companies were quoted as saying in San Jose, California.

The aim is to reach an agreement on the matter “without fighting the court battle,” they said.

Last month, Apple announced its cell phone-iPod-Internet communications device and called it “iPhone.”

The next day after the announcement, negotiations on trademark rights between them ended abruptly. Cisco went to the court and sued Apple, claiming trademark infringement. Cisco claimed Apple’s new device is “deceptively and confusingly similar” to its own line of wireless phones.

On its part, Apple said it is entitled to use the name “iPhone” because its device operates over a cellular network. Unlike Cisco’s phones, it said, the device uses the Internet. Apple planed to start marketing the product in June as one top leader insisted, “If Cisco wants to challenge us, we’re confident we’ll prevail.”

Under the U.S. federal law, two companies may share a trademark as long as their uses are not confusingly similar.

(Agencies)

Related:

Apple sued by Cisco over iPhone trademark

BEIJING, Jan. 11 (Xinhuanet) — Cisco Systems Inc. said on Wednesday that it filed a lawsuit against Apple for infringing its iPhone trademark after Apple unveiled a multimedia phone of the same name.

The suit was filed in the U.S. District Court for the Northern District of California.

Apple renames itself, unveils iPhone

Images of iPhone (ApplePhoto)

 Jan. 10 (Xinhuanet) — Apple on Tuesday introduced its hotly awaited iPhone in a move that could vault the iconic company into an instant leader in the world cellphone market.

Apple Computer CEO Steve Jobs announced its long-awaited leap into the mobile phone business and also renamed the company to just “Apple Inc.,” reflecting its increased focus on consumer electronics.

The phone will combine wireless technology, iPod capabilities and new features like Visual Voice Mail, and allows users to go directly to any of their voice messages without listening to any of the prior messages.

Now the PC is in on the action. Windows 7 includes more support for multitouch applications, making some basic touch commands work even on programs that weren’t designed for it. You’ll see more laptops and “all-in-one” desktops — computers that stash all the technology in the case behind the screen — with multitouch screens. HP, Dell and others have designed software intended to make it easy to flip through photos and music or browse the Web with a fingertip instead of a mouse.

Apple, for its part, has multitouch trackpads for laptops and a multitouch mouse but says it isn’t interested in making a touch-screen Mac. Chief Operating Officer Tim Cook calls it “a gimmick.”

Personal computers are changing — and not just because of the recent launch of Windows 7. Visit an electronics store and you might also find laptops are missing a familiar component. You could experiment with new ways of controlling some computers. And you’ll see portable PCs slimming down.

Even with all the attention lavished on Apple’s iPhone and Amazon.com Inc.’s Kindle this year, your PC likely is still the center of your digital universe. Here’s a look at what the season’s computer trends mean for you.

• We’re over drives.

But already the line between phones and PCs is blurring: PC makers are teaming with mobile carriers to sell netbooks that cost as little as $99 as long as the buyer subscribes to a wireless data service. A new buzzword, “smartbooks,” is emerging to describe a device that runs a smart-phone operating system such as Google Inc.’s Android but on bigger hardware that is more like a PC than a phone.

To get you to carry their laptops to the corner coffee shop, PC companies are treating their wares as fashion accessories, not just tools. You’ll see more colors and patterns, more design-conscious shapes and upscale materials.

Computers have come with “optical drives,” slots for CDs or DVDs, for years. They’ve been useful for installing new software, watching movies or transferring music libraries into digital form. But one of the biggest lessons from the craze for “netbooks” — inexpensive little laptops designed mainly for browsing the Web — is that people were so excited about the small, easy-to-carry size that they didn’t miss having a CD or DVD drive.

Apple Inc. got rid of an optical drive two years ago when it introduced the first sliver-thin MacBook Air. That wasn’t seen as a trendsetting step at the time because the computer, which cost $1,800 then, wasn’t meant for mainstream consumption. But netbooks, which start at $250 on BestBuy.com, surely are made for everyone. The wee laptops’ popularity is proof that people are finding it easy enough to download software, movies and music to portable computers, especially with the widespread availability of Wi-Fi and cellular Internet service. And plenty of services let you store files over the Internet, eliminating the need to burn backups to discs.

Taking out the optical drive doesn’t significantly lower prices. Doing so does let PC makers design much thinner laptops. Companies including Dell Inc. and Hewlett-Packard Co. have pulled DVD drives out of mid-range to more expensive computers, such as HP’s Pavilion dm3z, which starts at $550, all the way up to the $1,700-and-up HP Envy and Dell’s $1,500-and-up Adamo.

You just might want to think twice if you’re hooked on transferring CDs into MP3s — or if you spend a lot of time watching DVDs on airplanes and don’t want to squint at your iPod screen or get a separate portable video player.

• Good enough is plenty.

It might sound impressive when a PC sales pitch mentions multicore processors, state-of-the-art graphics chips, 4 or 6 or 8 gigabytes of memory and hard drives with a terabyte — 1,000 gigabytes — of storage. But another thing netbooks showed is that with a few exceptions — such as professional video editing, and maybe hard-core video-game playing — having lots of PC power is overkill.

There’s very little software that can take advantage of these powerful computers, says technology analyst Rob Enderle. That means there’s no “killer app,” the program that’s so cool or so useful it persuades everyday PC users to trade up.

While the microprocessors that act as the brains inside netbooks are less powerful than even those found in inexpensive full-sized laptops, they are sufficient for most Web browsing, e-mailing and word processing. And these computers are getting bigger hard drives, which you need for storing digital photos, music and video. Overall, they’re good enough that to people replacing 3- and 4-year-old PCs, netbooks feel downright fast.

Go for more power only if you watch high-definition TV and films, or edit HD home movies. Those tasks would require beefier machines.

• Everything’s getting carried away.

People want Internet access all the time, and PC makers are betting “smart” phones — even the iPhone — aren’t big or ergonomic enough for anything more complex or time-consuming than a quick e-mail reply.

“Thin and light is sort of the new black,” says Forrester Research analyst Paul Jackson.

The next frontier: cutting the cord for longer stretches. New chips that require less energy are emerging, and advances in battery technology are expected in the coming years to extend the time people can sit in the airport watching YouTube.

• Hands-on has its place.

In 2007, the iPhone made “multitouch” mainstream. Unlike ATM screens, which recognize one finger pushing on one spot at a time, the iPhone’s screen responds to pinching and swiping gestures made with multiple fingers. Microsoft Corp.’s coffee-table-sized Surface computer, designed for hotel lobbies and shops and also released in 2007, responds to similar gestures and can be operated by several people at once.

Apple does not officially break down results by country. In its most recent quarter, Apple stores generated $1.9 billion in revenue worldwide, the highest level ever.

“The main source of money for Apple and similar players are starting to come mainly from the online world than actually from the stores,” said Saverio Romeo, an analyst with consultants Frost & Sullivan.

He cited Apple’s recent announcement of over 2 billion downloads from its online application store. “It’s a promising revenue stream, considering that it’s just one year old.”

Computer giant Apple Inc will open its first French store beneath the Louvre museum on Saturday just two weeks after Microsoft opened a theme cafe to promote its Windows 7 software.background, with consumer spending in France still volatile and supported by government measures such as the car scrappage scheme.

But spending on must-have gadgets such as the Apple iPhone has proven robust. France Telecom has sold 1.3 million iPhones between November 2007 and September 2009, while new entrants SFR and Bouygues Telecom have sold around 200,000 iPhones since France Telecom lost exclusivity in spring.

“We are highly confident in the French consumer,” Apple’s head of retail, Ron Johnson, told Reuters at an event in Paris to launch the store.

MICROSOFT CHALLENGE

When asked whether Apple felt any pressure from Microsoft’s Windows 7 Cafe, which opened its doors on October 22, Johnson replied: “I think our store competes very well.”

The Microsoft cafe, on Rue Sebastopol, does not actually sell any Microsoft products. It sells drinks and food and offers the chance to try out Microsoft’s new Windows system, available ready bundled with new PCs or via upgrade.

A spokeswoman for Microsoft said the cafe would be open until the end of the year, with the possibility of keeping it open an extra few months into 2010.

Although Microsoft had a head start promoting its new Windows operating system in France, Apple has placed its first store in a prized position in the bowels of the Louvre museum’s “Carrousel” shopping center.

Both companies have large operations in France, according to Paul Jackson, an analyst with Forrester Research, but he said Apple in particular was looking to burnish its premium image with its new Paris site.

“It’s more to do with the feeling of association with premium shopping than necessarily the market itself,” said Jackson. He said France as a technology market tended to lag behind Britain and Germany, which already have Apple stores.

Apple’s French expansion will take place against an uncertain economic

Analysts say Apple may not suffer much from Microsoft’s buzz, largely because iconic gadgets such as the iPod and iPhone have a “cool factor” that Microsoft software lacks.

“Microsoft has been lumbered with this image of being a global giant which keeps getting things wrong,” said Robert Gregory, an analyst at research firm Planet Retail.

Apple launched its chain of retail stores in 2001 and now runs 273 stores around the world.

Microsoft recently followed suit and opened its first retail outlet in Arizona, with a second planned for California. It is Microsoft’s second attempt at the retail business after a brief experiment with Sony Corp in San Francisco’s Metreon center a decade ago.

Analysts say these branded retail outlets are more marketing tools than growing sources of profit.

Planet Retail’s Gregory said Apple’s British operations, including its London store on Regent Street, made a loss in 2008 and might just break even this year, according to data from Companies House.