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We’ve been closely watching the construction of Microsoft’s new retail store at Seattle’s University Village — which happens to be located directly in the line of sight of Apple’s store at the outdoor mall. Now, in what’s shaping up to be a fierce retail rivalry, Apple plans to double the size of its Bellevue Square store and move to a new space that’s located  — yep, you guessed it — directly in the line of sight of Microsoft’s new store, according to a report from ifoAppleStore.com.

Microsoft opened its Bellevue Square location to much fanfare last November, including an appearance by Steve Ballmer and a concert by Miley Cyrus. (The store also happens to be just three doors down from Apple’s much smaller location).

Microsoft is a new entrant in the retail game, but it’s strategy was laid out in 2009 when CNET reported that the company planned to open outposts in “proximity to Apple” stores.

Now, it may just be happenstance that Apple’s new location on the second floor of the mall will loom above the Microsoft store in direct line of sight of shoppers. ifoAppleStore.com reports that the new Apple store will open later this year, pointing out that “every single visitor leaving the Microsoft store across the hallway and one floor below” will be able to look up to the Apple store.

We’ve got calls into Bellevue Square for more details, and we’ll update the post as we hear more. An Apple employee at the Bellevue Square location said this morning that he didn’t have “any news” that they were planning to move, noting that the they are still operating in the same location.

Stay tuned.

Previously on GeekWire: Microsoft’s retail chain growing to 11 stores, but should there be more?

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