Change in China key for Microsoft

  • Associated Press
  • Monday, April 17, 2006 9:00pm
  • Business

BELLEVUE – Microsoft Corp.’s Windows operating system has long been popular in China. The problem has been getting Chinese users to pay for legitimate copies.

On the eve of Chinese President Hu Jintao’s visit to Microsoft’s Redmond campus today, company officials hope things are changing. Chinese government officials say they are serious about cracking down on widespread software piracy, and some Chinese computer makers are pledging to ship more computers with legitimate Windows software installed.

One of those companies, Lenovo Group Ltd., met Monday with Microsoft officials to reaffirm Lenovo’s 5-month-old commitment to ship computers with genuine operating systems. Microsoft held a similar meeting last week with Chinese computer manufacturer Founder Technology Group Corp., also among the companies that have pledged to promote legal Windows use.

Although analysts say it could be some time before the promised changes have a significant effect on Microsoft’s sales, the pledges are a feel-good backdrop for Hu’s visit with Bill Gates and other business and government executives.

Chinese government officials promised their U.S. counterparts last week to fight software piracy as they tried to ease tension over the record trade gap between the two countries.

For Microsoft, the move is important because it sees China as a major market in which to grow revenues.

Lenovo, which last year bought IBM’s personal-computer business, is the world’s third-largest computer company. In an interview Monday with The Associated Press at a hotel Bellevue, Lenovo Chairman Yang Yuanquing said 70 percent of the computers Lenovo sells in China are now loaded with licensed Windows copies, up from 10 percent six months ago.

Yang said the Chinese government has been a major force behind the change, both by requiring government agencies and big companies to install legal software and by cracking down on piracy.

Lenovo expects to buy $1.2 billion worth of Microsoft software in the next 12 months, including about $200 million for the Chinese market.

The company also is eager to improve protections on intellectual property because of its own international aspirations.

“As we become a global company, an international company, we should be more proactive, certainly, to do something there, to be more responsible,” Yang said.

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