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          CHINA / National

          China PC sales with legal Windows jumps
          (Reuters)
          Updated: 2006-06-02 08:57

          The number of PCs sold in China containing legal copies of Microsoft's Windows operating system doubled in the first quarter from the fourth, as major vendors joined a campaign to stamp out piracy, new data showed.

          Some 48 percent of PCs shipped in China in the three months through March came with legal copies of Windows already installed, compared with 25 percent in the fourth quarter of 2005, according to figures supplied by data tracking firm International Data Corp. (IDC).

          The big jump came as the country's major homegrown vendors, including Lenovo Group Ltd. (0992.HK), Founder Group, Tsinghua Tongfang (600100.SS) and TCL Corp. (000100.SZ), signed a recent series of landmark deals agreeing to load legal copies of Windows onto most or all of their PCs sold in China.

          Lenovo announced the first such deal late last year, with most of the other companies following suit in the spring.

          Many such vendors previously sold PCs with free operating systems such as Linux or none at all, in what many saw as an invitation for buyers to take those PCs out to small shops where they could then have pirated copies of Windows installed.

          Observers believe the Chinese vendors signed their deals with Microsoft in April under pressure from Beijing, which is making serious efforts to stamp out piracy.

          In late March, the Chinese government went so far as to issue a decree requiring PC makers to install a licensed operating system on each machine before it left the factory.

          The major PC makers, along with global giants Dell Inc. and Hewlett-Packard Co. and Taiwan's Asustek Computer Inc., now account for about three-quarters of PC sales in China, according to IDC.

          Thus, even if all those agree to install legal windows on their computers, many of the remaining 25 percent, which carry little-known brands or no brands at all, could continue to sell without legal copies of the Microsoft operating system.

          IDC analyst Bryan Ma said a general price increase was observed for PCs with Windows installed in the first quarter compared with comparable models sold without the operating system in the fourth.

          Windows usually retails for US$80 to US$100, but big buyers like Dell and HP that buy huge quantities are believed to pay much less -- usually around US$50-US$55 per copy, according to analysts.

          China is the world's second largest PC market after the United States, with 19 million units shipped last year and the number expected to grow 17.6 percent this year, according to IDC.

          Windows now powers some 90 percent of the world's PCs, and Microsoft estimates the figure could be even bigger in China. But the majority of those systems in China are also believed to be pirated copies.

           
           

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