Microsoft profit in China takes a beating due to massive piracy

first_imgIn China, Microsoft operating systems absolutely dominate the market — with an approximate 99.3% share. You’d probably assume that translates to a substantial amount of profit, especially in a country with a population of more than 1.3 billion. Yet China comes in behind The Netherlands — with a population of about 17 million — on Microsoft’s profit charts.What’s to blame for the woeful situation in China? Piracy, of course.AdChoices广告Microsoft estimates that its per-PC profit level in China is about 1/6th what it is elsewhere in the world. While the the number of Windows PCs sold in China this year will easily equal the number sold in the U.S., CEO Steve Ballmer figures the actual profit Microsoft sees will be about 95% less.In China, finding bootleg copies of Windows and Office for a few U.S. dollars is all too common, despite Microsoft’s best efforts to derail piracy. The company has worked with the Chinese government, which, for its part, has ordered that all state agencies are required to use licensed software. There are also ongoing efforts to ensure that PC manufacturers are utilizing legitimate copies of the software which comes pre-installed on computers, and piracy rates have, in fact, slowed a bit over the past five years. Between 2005 and 2010, pirated software use dropped from 86% to 78%, still a staggeringly high percentage.Notorious Chinese pirates have even gone so far as to combine Ubuntu and a suspiciously Windows XP–ish theme to get around that whole nasty licensing thing. Microsoft remains hopeful, however, and continues to increase its presence in China — an estimated 300 new employees are on the agenda for its Beijing offices in 2011.More at Wall Street Journallast_img

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