Microsoft steps up mainland push

PUBLISHED : Tuesday, 11 August, 2009, 12:00am
UPDATED : Tuesday, 11 August, 2009, 12:00am

Microsoft Corp has big plans for itself and its mainland business partners as it rolls out a number of flagship products over the next 12 months.

Simon Leung Lim-kin, the chairman and chief executive of Microsoft Greater China, said the company would also continue making significant new investments on the mainland, but he declined to elaborate.

'China represents a tremendous opportunity for us,' Mr Leung said. 'In terms of personal computer shipments alone, unit shipments in the country will reach about 45 million units this year from about 40 million last year.'

That made the mainland the world's second-biggest personal computer market after the United States, and with 'larger annual unit shipments than those of Britain, Japan, Germany and India combined', he said.

The mainland has also bucked the lingering weakness in global personal computer demand, as purchases rebounded in the second quarter this year after being either flat or on the decline in the past several months.

Preliminary estimates by research firm International Data Corp (IDC) showed that mainland personal computer shipments reached 12 million units in the quarter to June, up from 8.9 million units in the first three months of the year, on improved market confidence fuelled by Beijing's economic stimulus efforts.

Mr Leung said Microsoft's 'most substantial product rollout in years' would likely boost its partners, including those that sell hardware, write software, provide information-technology services and serve as distribution channels.

The company's first major product release will be Windows 7, the long-awaited upgrade to its personal computer operating system, on October 22.

Following over the next several months, in no particular order, would be Windows Mobile version 6.5 and version 7.0, Office 2010, SharePoint 2010, Exchange 2010, the Business Productivity Online Suite, Silverlight 3 and Expression 3, Windows Server 2008 R2, and the new cloud-computing solution Windows Azure.

'We expect these products, starting with Windows 7, will help encourage consumers and companies to start buying new computer hardware, software and services from our partners,' Mr Leung said.

'Since the vast majority of companies in the Microsoft ecosystem are locally owned small and medium-sized businesses, the bulk of the revenue they earn will remain in their local economies and help drive economic growth.'

Other firms worldwide will make an average US$18.52 for every dollar of Microsoft revenue from the new operating system, an IDC report says.

Despite lingering piracy problems, sales of computer operating system software continue to make up the largest chunk of Microsoft's business on the mainland.

'We're also doing pretty decent business in hardware peripherals,' Mr Leung said.

Hardware peripherals include computer mouse, keyboards and gaming equipment, such as joysticks.

Mr Leung said Microsoft was also trying to draw more mainland users to its new search engine, Bing, through its alliance with Yahoo.

Erik Johnson, the head of Microsoft's search engine unit for Greater China, said: 'Our focus in Greater China is to provide the best relevancy, the most innovative user interface and the best natural language interpretation of the Chinese language.'

The problem, however, is that neither Microsoft nor Yahoo had a significant stake in the mainland's fast-growing internet search market, where Baidu is the leading provider.