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Lenovo now selling more computers with Windows XP
BLOOMBERG
Wednesday, Apr 19, 2006, Page 10
Lenovo Group Ltd (??), China's largest personal computer maker, is selling
more machines with Windows XP software, suggesting progress in Microsoft
Corp's efforts to curb piracy, Lenovo chairman Yang Yuanqing (???) said.
About 70 percent of Chinese buyers opt for Microsoft's Windows, the world's
most popular operating system, up from 10 percent in November when Lenovo
started pre-installing copies, Yang said yesterday in an interview. Lenovo
will buy US$1.2 billion worth of Windows in the next year, the companies
said on Monday.
"It's very good to see for improving the overall environment," Yang said at
a hotel in Bellevue, Washington.
Buyers are responding to marketing that suggests that pirated software has
more flaws and viruses, he said.
Microsoft chairman Bill Gates, 50, has intensified his lobbying of the
Chinese government to crack down on piracy as the Redmond, Washington-based
company last year only got 1 percent of sales in the nation, the world's
second-largest PC market after the US. About 90 percent of software used in
China is pirated, according to researcher IDC and the Business Software
Alliance, a group funded by Microsoft.
Yang on Monday signed a joint marketing agreement with Gates and Microsoft
chief executive officer Steve Ballmer on the eve of a US visit from Chinese
President Hu Jintao (???). A flurry of official statements have preceded the
visit, including a mandate dated March 30 by three Chinese agencies,
requiring all locally made PCs to come installed with genuine operating
software.
The government mandate "does mark a breakthrough in overall education of the
market," said Scott Di Valerio, corporate vice president of Microsoft's OEM
Division, where he oversees relations with PC makers. "The support there is
really starting to pay off."
In addition to lobbying, Gates has boosted Microsoft's investments in China
and donated to Chinese schools as he tries to spark more software sales.
Microsoft's worldwide sales rose 8 percent in fiscal 2005, slowing from a 14
percent gain the previous year. Microsoft is the world's biggest software
maker.
Lenovo's estimated purchases of Windows includes the ThinkPad line of
computers acquired last year from IBM Corp. Lenovo didn't provide a
comparison for last year or a figure for China.
This month, three other Chinese PC makers said they will buy a combined
US$430 million of Windows licenses. Microsoft had US$12.2 billion in fiscal
2005 sales from the division that includes the Windows operating system.
People can now buy illegal copies of Windows for a few dollars on the street
in China. Machines installed with genuine Windows software will cost more
than those Lenovo was selling earlier, though Yang declined to say by how
much.
"Our pricing strategy is to keep this gap very small," Yang said. "That's
why we can have this deal with Microsoft."
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