Microsoft’s China Revenues Plundered by Pirates
Beleaguered Microsoft CEO Steve Ballmer told employees in Beijing that the company’s revenues in China are only a twentieth of those in the United States, despite similar PC sales in each of the two countries. Microsoft reportedly takes more money even in the Netherlands (population 17 million) than in China. From the Wall Street Journal:
The stakes are only getting larger. Already the biggest market for cars, cellphones, and commodities like iron ore, China is on track to surpass the U.S. as the world’s largest PC market next year, according to IDC. This year, the market research firm projects PC unit shipments in China are likely to increase 12% to 71 million units, just shy of the 75 million units in the U.S., where it expects sales to be flat ….
He made the remarks to hundreds of employees—many wearing Microsoft T-shirts, in a crowded room in Microsoft’s new research-and-development building, which he said cost Microsoft $400 million. PC sales in China will be “as big as the U.S. market this year,” he said, yet “our revenue in China will be about a twentieth of our revenue in the United States ….”
The company has historically tried a collaborative approach with Chinese officials, securing deals to require Chinese PC makers to ship their products with legitimate copies from factories.
China’s government has acknowledged problems but says it is taking steps to improve the situation. Among other measures, the government has ordered all state institutions to buy licensed software.
The Business Software Alliance, an industry advocacy group, estimates 78% of the PC software installed in China last year was pirated, down from 86% in 2005.