Ballmer: Piracy costs Microsoft 95% of potential Chinese revenue

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By Peter Bright | Published about 12 hours ago
Speaking on Wednesday at the opening of Microsoft's new Microsoft Asia-Pacific R&D Group headquarters in Beijing, Microsoft CEO said that the company earned revenue in China amounting to only five percent of that earned in the US, in spite of comparable sales of personal computers between the two countries. The reason for the difference? Piracy, unsurprisingly.

Ballmer rejected the common claim that software is too expensive. Though acknowledging that PCs were too expensive for many in the country, he argued that "if you can , you could afford the software"—and hence that rampant piracy in the country was a product of slack enforcement of intellectual property rights rather than software priced out of reach of users.

Even other countries with widespread piracy did not have the same discrepancy between PC sales and Microsoft revenue. Ballmer claimed that Microsoft earned six times more per PC sold in India than it did in China, and that if Chinese IP protection were as strong as India's then the market would be worth "billions of dollars."

Piracy in China has long been a bone of contention between the Chinese government and software makers. The Chinese government acknowledges the problem, and says it has taken steps to reduce the level of piracy. Nonetheless, extremely high levels of piracy are seen, with the Business Software Alliance anti-piracy group claiming that 78 percent of software installed in the country last year was pirated, down from 86 percent in 2005.

http://arstechnica.com/microsoft/news/2011/05/ballmer-piracy-costs-microsoft-95-percent-of-potential-chinese-revenue.ars