Microsoft: 2007 China sales to rise 20 percent

Software giant Microsoft said on Tuesday it expects its China sales to rise more than 20 percent this year, boosted by new products and a national crackdown on software piracy.

Responding to complaints by Western governments and companies, as well as criticism from a growing field of domestic firms, China has been clamping down on piracy over the last two years to the benefit of software makers such as Microsoft.

As part of the campaign, most of the nation's top domestic PC sellers, including Lenovo and Founder, have pushed to boost their number of PCs sold with legal copies of Microsoft's Windows operating systems already installed.

Other major foreign players in the market, including global leaders Hewlett-Packard and Dell, are pushing similar policies in China.

Reflecting the trend, only about 30 percent of Lenovo PCs now being sold will ultimately contain pirated Windows systems, down sharply from 90 percent last year, said Timothy Chen, chief executive officer of Microsoft's greater China region.

"We've made great progress there," he told Reuters on the sidelines of an event in Taipei. China is the world's second-largest PC market by unit sales, with more than 20 million units shipped last year, according to data tracking firm IDC.

Following the implementation of China's crackdown starting in late 2005, IDC estimated the number of PCs sold with legal copies of Windows reached about 50 percent in last year's first quarter.

Rampant piracy there previously made the market a difficult one for software makers like Microsoft, with many industry watchers estimating that most computers in the country used pirated copies of Windows.

Chen added that growth was also coming from new product sales, including the company's newly introduced Vista operating system, the next-generation equivalent of Windows, which Microsoft rolled out at the beginning of this year.

The company plans to launch seven new products in China this year, and another six in 2008, Chen said.

"It is a great year for the region," he said. "Vista is selling very well." Microsoft founder Bill Gates said in February that Vista had been well received and that PC vendors had seen a nice lift in their sales.

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