Microsoft Corp opened the first in a planned chain of stores on Thursday, aiming to match rival Apple Inc's successful foray into retailing.

Hundreds of people, some of whom had waited all night outside the Fashion Square Mall in this upscale Phoenix valley city, were met with cheers by staff wearing Microsoft T-shirts.

It's fantastic, student Bobby Cramer said, shouting to make himself heard above the scrum. It's exciting to have ... a place to go to where you can get the software and hardware together.

Microsoft had a short-lived experiment in retailing in San Francisco's Metreon Center 10 years ago.

Some 500 customers picked over hardware including Xbox 360s, Hewlett-Packard Co and Dell Inc laptops, as well as the Windows 7 operating system, which launched on Thursday.

Microsoft announced in February its plan to open stores, hiring a former Wal-Mart Stores Inc executive to run them. A second store is due to open in Orange County, California, in coming days.

Microsoft may have a way to go to emulate Apple's splashy store openings and product launches. For example, when Apple began selling its 3G iPhone in July 2008, thousands of people camped outside stores from all over the world for days for the chance to buy one.

WARM AND FUZZY

Microsoft chief executive Steve Ballmer said last week that through the stores, the company was looking to make a direct connection with users, showing the customer what you really can do.

The first shoppers through the doors clearly liked the concept.

It's a good idea to give consumers a warm and fuzzy (feeling) about using an operating system ... It will make consumers feel better about their purchase, said Hafthor Stefansson, an IT consultant who said he uses both Apple and Microsoft systems.

In July, Microsoft's chief operating officer said the company would open stores right next door to Apple stores. The nearest Apple store to Scottsdale is several miles away in Phoenix.

They're doing exactly what Apple did five years ago - the concept's a rip off, said James Smith, 31, a cab driver who turned out for the opening.

Microsoft might have come up with a better idea than taking Apple's straight out, he said.

But videographer Erin Phoenix, a long-time Apple user wearing an i-Phone T-shirt to the opener, said he thought the result would be good for consumers.

They are kind of copying the concept the Apple Stores have of customer service ... (but) it will also give Apple more competition.

(Reporting by Tim Gaynor; Editing by Toni Reinhold)

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