Ballmer: Piracy costs Microsoft 95% of potential Chinese revenue(arstechnica.com)
arstechnica.com
Ballmer: Piracy costs Microsoft 95% of potential Chinese revenue
http://arstechnica.com/microsoft/news/2011/05/ballmer-piracy-costs-microsoft-95-percent-of-potential-chinese-revenue.ars
4 comments
And yet, they can afford the hardware, which costs a minimum 5x as much as the software. It's not that they can't afford it. They choose not to. It's easy enough to obtain pirated copies of Windows in China. It's harder in countries with developed business environments and legal systems.
The salary argument doesn't work, either. Chinese PC penetration is something like 15%, so you really need to look at the average salary of the top 20% when considering affordability, not the country as a whole.
It's better to look at this as your usual supply / demand curve. If the price of the hardware and software combination were $100 higher (about the cost of Windows 7 Home Premium in China), then fewer people would buy PC's, but Microsoft would make a ton more across all PC sales.
I believe the lost revenue argument, but it's not 100% and it certainly isn't 0.
EDIT: Missed a 'the'.
The salary argument doesn't work, either. Chinese PC penetration is something like 15%, so you really need to look at the average salary of the top 20% when considering affordability, not the country as a whole.
It's better to look at this as your usual supply / demand curve. If the price of the hardware and software combination were $100 higher (about the cost of Windows 7 Home Premium in China), then fewer people would buy PC's, but Microsoft would make a ton more across all PC sales.
I believe the lost revenue argument, but it's not 100% and it certainly isn't 0.
EDIT: Missed a 'the'.
...and following usual RIAA logic that's 150 million times some 30 dollar for a concert recording on DVD, so 4.5 Billion to the pirates!
The majority of PCs sold run in the world runs windows. They are pretty much complementary. So the amount of PC sold should be similar to the amount of OS sold.
If they are not similar then you got to look at substitute OS that these PC users are using, ie linux, pirated software, etc. I highly doubt these Chinese consumers know anything about Linux being a viable option. Linux hasn’t even deeply penetrated the desktop OS market here in America. There could be higher density of usage in areas like the Silicon Valley, but as a whole the average joe shmo American who are more enlightened consumers than the Chinese won’t be using Linux as a alternative in mass.
So what are these PCs running on? It’s pirated copies of different distributions of Windows.
This is because the IP laws aren’t being enforced, Chinese consumers don’t see the value of buying the real windows version (ie: updates) or the consumer is not educated and doesn’t know if they are buying real or a pirated copy of windows.
Microsoft is getting jipped in china because they should be getting $ on almost every PC sold in that country.
If they are not similar then you got to look at substitute OS that these PC users are using, ie linux, pirated software, etc. I highly doubt these Chinese consumers know anything about Linux being a viable option. Linux hasn’t even deeply penetrated the desktop OS market here in America. There could be higher density of usage in areas like the Silicon Valley, but as a whole the average joe shmo American who are more enlightened consumers than the Chinese won’t be using Linux as a alternative in mass.
So what are these PCs running on? It’s pirated copies of different distributions of Windows.
This is because the IP laws aren’t being enforced, Chinese consumers don’t see the value of buying the real windows version (ie: updates) or the consumer is not educated and doesn’t know if they are buying real or a pirated copy of windows.
Microsoft is getting jipped in china because they should be getting $ on almost every PC sold in that country.
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Utter bullshit. Microsoft chooses to price Windows high in China, knowing that most people will therefore make a private copy, because Microsoft is afraid that if they price it low, it will undercut sales in western nations (people will import legitimate Chinese copies of Windows to the U.S.).
That's their business decision and a perfectly acceptable tradeoff. But you don't get to make that decision, profit from it, and also whine about it.
That's their business decision and a perfectly acceptable tradeoff. But you don't get to make that decision, profit from it, and also whine about it.
Plus, claims like "potential sales" are always bogus. Piracy happens there for a reason. Windows costs more than most people's monthly salaries. If Windows cost $5 there, we'd probably see a lot more buy it. Not all countries can pay the same price for the products. It's something the music industry doesn't seem to get either.
EDIT: I just noticed Rebecca Black's Friday video here and I saw it had 150 million views on Youtube. I suppose that's 150 million lost sales right there, too.