????By Philip Elmer-DeWitt

????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).

????“Introduced in 1990, Windows was a rip-off of Apple’s Macintosh operating system. Microsoft introduced the Zune MP3 player in 2005, a rip-off of the iPod Classic. However, the Zune, another instance of a failed copy attempt, has never been able to gain more than a few percentage points of market share compared to the iPod’s 70%-plus market share. Meanwhile, Apple has moved on to the iPhone and iPod Touch.

????“Now Microsoft plans to copy the Apple Stores. In our opinion, Microsoft faces major challenges in this regard. It’s easy to copy the floor plan of an Apple Store as well as its fixtures. Leaked slides indicate Microsoft plans to do exactly this …

????“But Microsoft will not find it easy to hire a staff that’s as passionate about the products its sells as the staffs in the Apple Stores. Indeed, given Microsoft’s reputation, it may be nearly impossible.”

????Apple hired Ron Johnson from Target (TGT) to design its stores under the critical eye of Steve Jobs. Microsoft, Wolf notes, turned to David Porter, a former vice president at Wal-Mart (WMT) — “a company that has consistently eschewed premium products.”

????“To convince customers that there’s more to Microsoft than the mostly lackluster me-too products it now sells represents the major challenge of its stores,” Wolf continues. “The mantra of the campaign, according to leaked documents, is ‘Engage, Educate and Excite.’ Microsoft plans to focus on the ‘user experience.’ But typical Windows users are not interested in this. If they are, they most likely have already switched to a Mac.”

????To support that last point, Wolf offers the following chart. It shows the exponential growth of former Windows customers now using Macs. Wolf estimates that since 2004, 14 million Windows users have switched to a Mac, equal to more than 75% of the size of the Mac’s 2004 user base. Of the 150 million customers who visited Apple Stores in fiscal 2008, he estimates that more than half were Windows users.

????Yellow triangles = installed base of Windows switchers

????According to leaked documents, Microsoft’s stores plan to focus on six product families — Office, Bing, Windows, msn, the Zune music player and Xbox.

????The company, says Wolf, has its work cut out for it in a few of those categories.

????“Windows Mobile in its current incarnation,” he writes, “is clearly the least user-friendly mobile operating system on the market. How does Microsoft put lipstick on this product? What Microsoft actually needs is a new mobile operating system that can compete with the iPhone OS, Android and BlackBerry. The same type of comments applies to the Zune. It’s a so-what product that’s now two generations behind the iPod.”

????“In our opinion,” Wolf concludes, “Microsoft’s venture into retail is conceptually equivalent to an oxymoron.”

????And then he closes by quoting John Dvorak: “Now comes the latest fiasco: Microsoft wants to open retail stores, all of them next to or near an Apple store.”