Microsoft Losing Billions To Piracy In China

Microsoft is suffering heavy revenue losses to piracy in the Chinese software market, the company claims.

According to reports, the software heavyweight’s turnover in China, the most populous nation in the world, is merely 5 percent of that in the US, despite the fact that the PC sales in the two countries are almost neck-and-neck.

Market observers say that Microsoft is currently earning a decent annual profit in China, almost $2 billion.

According to a Wall Street Journal report, Steve Ballmer, Microsoft’s chief executive said in a company meeting explaining the enormous scope the Chinese market holds for his company: “We're literally talking about an opportunity that is billions of dollars today."

Clearly, Microsoft feels that countering piracy in the Chinese market will increase corporate profits, although its not clear how to stop piracy effectively or the extent to which stopping piracy contributes to increased sales.

"As big as the US market this year ... our revenue in China will be about a twentieth of our revenue in the United States," Ballmer said.

"I'm not saying everybody in China could afford to buy a PC... but if you can, you could afford the software."