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HANOI: Microsoft Corp is less optimistic about China than India or Indonesia, due to the country's lack of progress, in stamping out software piracy, chief executive officer Steve Ballmer said.
"India is not perfect but the intellectual property protection in India is far, far better than it would be in China," the head of the world's largest software maker has said in an interview in Hanoi, Vietnam. "China is a less interesting market to us than India, or Indonesia".
Ballmer's concerns underscore growing dismay among the US companies toward operating in the world's third-largest economy.
In March, Google Inc moved its Chinese service out of the mainland to avoid censorship rules, and the American Chamber of Commerce in Beijing said last month its members face an increasingly difficult regulatory environment.
China has implemented more than 1,000 measures related to the protection of intellectual property and the government will continue such efforts, said Chen Rongkai, a media officer at the nation's Ministry of Commerce in Beijing.
"China's effort at strengthening the protection of intellectual property is universally recognised," Chen said.
Lack of progress in protecting intellectual property has led China, which may overtake the US as the world's biggest personal-computer market in a year, to generate less revenue for Microsoft than India and South Korea, Ballmer said.
China's gross domestic product is twice the two economies combined.
The value of pirated software in China almost doubled to USD 7.58 billion from 2005 to 2009, the highest increase in the world, Washington-based Business Software Alliance and market researcher IDC said in a report in May.
While the piracy rate in the country fell to 79 per cent last year, it's higher than in India, the Philippines and Thailand, according to the report.
Ballmer is right," said Sandeep Aggarwal, an analyst at Caris & Co in San Francisco. "It is not easy to control piracy in China". He estimates that as much as 95 per cent of the copies of Microsoft's Office software and 80 per cent of its Windows operating systems are pirated in China.
For Microsoft, based in Redmond, Washington, billions of dollars in lost revenue from piracy in China, outweigh the possible benefits of expanding in the country through acquisitions, Ballmer said.
For example, owning Baidu Inc, China's biggest Internet search-engine operator, would only boost Microsoft's revenue by about one per cent, he said.
Microsoft gets about three per cent of its sales from Asia, excluding Japan and Australia, Ballmer said.
"There are two things that make a country interesting. One is it buys a lot of PCs, the other is they pay for the software that gets used on those PCs," Ballmer said.
In China, "there is no software market to speak of". The American Chamber of Commerce in Beijing said in an annual report last month that it expects an increase in trade tension between the US and China.
While China should move towards a more flexible currency, the US should focus more on pressing the Chinese government to better enforce laws safeguarding intellectual property, change rules that limit foreign ownership and reduce tariffs.
Ballmer's comments coincide with trade talks between US officials, including Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton and their counterparts in Beijing.
http://economictimes.indiatimes.com...t-CEO-Ballmer/articleshow/5973350.cms?curpg=1
"India is not perfect but the intellectual property protection in India is far, far better than it would be in China," the head of the world's largest software maker has said in an interview in Hanoi, Vietnam. "China is a less interesting market to us than India, or Indonesia".
Ballmer's concerns underscore growing dismay among the US companies toward operating in the world's third-largest economy.
In March, Google Inc moved its Chinese service out of the mainland to avoid censorship rules, and the American Chamber of Commerce in Beijing said last month its members face an increasingly difficult regulatory environment.
China has implemented more than 1,000 measures related to the protection of intellectual property and the government will continue such efforts, said Chen Rongkai, a media officer at the nation's Ministry of Commerce in Beijing.
"China's effort at strengthening the protection of intellectual property is universally recognised," Chen said.
Lack of progress in protecting intellectual property has led China, which may overtake the US as the world's biggest personal-computer market in a year, to generate less revenue for Microsoft than India and South Korea, Ballmer said.
China's gross domestic product is twice the two economies combined.
The value of pirated software in China almost doubled to USD 7.58 billion from 2005 to 2009, the highest increase in the world, Washington-based Business Software Alliance and market researcher IDC said in a report in May.
While the piracy rate in the country fell to 79 per cent last year, it's higher than in India, the Philippines and Thailand, according to the report.
Ballmer is right," said Sandeep Aggarwal, an analyst at Caris & Co in San Francisco. "It is not easy to control piracy in China". He estimates that as much as 95 per cent of the copies of Microsoft's Office software and 80 per cent of its Windows operating systems are pirated in China.
For Microsoft, based in Redmond, Washington, billions of dollars in lost revenue from piracy in China, outweigh the possible benefits of expanding in the country through acquisitions, Ballmer said.
For example, owning Baidu Inc, China's biggest Internet search-engine operator, would only boost Microsoft's revenue by about one per cent, he said.
Microsoft gets about three per cent of its sales from Asia, excluding Japan and Australia, Ballmer said.
"There are two things that make a country interesting. One is it buys a lot of PCs, the other is they pay for the software that gets used on those PCs," Ballmer said.
In China, "there is no software market to speak of". The American Chamber of Commerce in Beijing said in an annual report last month that it expects an increase in trade tension between the US and China.
While China should move towards a more flexible currency, the US should focus more on pressing the Chinese government to better enforce laws safeguarding intellectual property, change rules that limit foreign ownership and reduce tariffs.
Ballmer's comments coincide with trade talks between US officials, including Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton and their counterparts in Beijing.
http://economictimes.indiatimes.com...t-CEO-Ballmer/articleshow/5973350.cms?curpg=1
