Piracy Prevents Microsoft from Generating Substantial Software Sales in China

From TheStreet: Microsoft Putting All Its Chi in China

"Piracy has prevented the tech behemoth from generating substantial software sales in China, and the theft does not appear to be abating anytime soon. (...) About 90% of software on (Chinese) PCs is pirated. (By comparison, the U.S. market is estimated to have a piracy rate of about 22%, according to a study by the Business Software Association of Australia.)"

"In China alone, the second-largest PC market in the world, a country that will care about intellectual property for its own future development, piracy is well, well, well above 90%," Microsoft CEO Steve Ballmer said at the company's recent analyst day. "There are billions of dollars of growth opportunity merely by selling the value of legitimate software."

"In 2004, the software piracy rate in China fell minimally - to 90% from 92% a year earlier, according to the Business Software Alliance. IDC estimated software piracy losses of $3.57 billion in 2004 in China, which has the third-highest piracy rate."

"Despite pressure from the U.S., more protection of IP by the Chinese government is a long way off. "There is a movement toward more and more protection of intellectual property," Rashtchy says. But he figures it will take about 10 years for the amount of protection to be significant."