Microsoft appalled by software piracy in China

Microsoft chief executive Steve Ballmer reveiled that his company is suffering greatly from software piracy in China. Although China is potentially the world’s largest computer and software market, Ballmer said revenues in China are only 5% of that in the United States, even though personal computer sales in the two countries are nearly equal.

Mr. Ballmers complaints underlined the challenges reported by other Western firms in protecting their copyrights in China, the largest counterfeit and piracy market in the world. The issue has long been a sore spot in political and trade relations.

In a speech addressed to Microsoft employees in a new Beijing office, Ballmer said revenue per personal computer sold in China is only a sixth of the amount the company gets in India, and that total revenue generated in China is less than revenues in The Netherlands, a country of only about 17 million. The company’s income is leaking away alarmingly fast due to illegal copying. "We're literally talking about an opportunity that is billions of dollars today" if China had the same level of copyright protection as –for example- India” according to Steve Ballmer.

He rejected the notion that Chinese consumers cannot afford his company's core Office software. "I'm not saying everybody in China can afford to buy a PC. but if you can buy a computer, you could also afford the software," he said.

Despite encouraging efforts by the Chinese authorities to improve their poor track record, a Chinese government-funded survey, published earlier this month, showed that piracy had cost the global software industry more than $20 billion in losses in the Chinese market last year. A US official said although China is making progress on improving protection of intellectual property rights, there is still concern about Beijing's longer term commitment. It kept the country on this year's "priority watch list" for weak protection of intellectual property rights.

Source: Wall Street Journal