When the facts change, I change my mind. What do you do? -- John Maynard Keynes

Thursday, May 26, 2011

China­­—what a great place to do business!

Follow johnmpoole on TwitterAs detailed today in a story in the Wall Street Journal, Microsoft Corp.'s revenue in China this year will be about 5% of what it gets in the U.S. even though personal-computer sales in the two countries are almost equal. The CEO of Microsoft, Steve Ballmer, said revenue per personal-computer sold in China is only about a sixth of the amount it gets in India, and that its total revenue in China is less than what it gets in the Netherlands, a country of less than 17 million people.
"We're literally talking about an opportunity that is billions of dollars today" if China's intellectual property rights protection were at the level of India's, he said. PC sales in China will be "as big as the U.S. market this year," yet "our revenue in China will be about a twentieth of our revenue in the United States."

Ballmer's remarks on China indicate the damage Microsoft believes piracy is causing it in the world's No. 2 economy.  “The company has long complained about the problem—which has also been an increasingly central subject in U.S.-China trade talks—but Microsoft has provided little detail on the impact. China's government has acknowledged problems with piracy but says it is taking steps to improve the situation.”  Yeah, right.
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