Microsoft executive says compliance with Chinese officials 'challenging'

PUBLISHED : Tuesday, 03 March, 2015, 10:09am
UPDATED : Thursday, 16 April, 2015, 12:10pm

Microsoft says it is working closely with Beijing to make sure its under-investigation China business stays on the right side of the law. But the firm finds compliance “challenging”, a top company executive has revealed.

China is very important to the computer empire that creates software, operating systems, phones and gaming consoles – and it aims to be successful in one of the world’s largest consumer markets.

In line with that aim, with a quest to conquer the mid-range consumer phone market, Microsoft unveiled two new budget smartphones, the Lumia 640 and 640 XL, at the Mobile World Congress (MWC) in Barcelona, Spain, in a challenge to Chinese smartphone maker Xiaomi.

Stephen Elop, the executive vice-president of Microsoft’s devices and services business, said the company was just as “focused on” getting back on track in China after settling a tax dispute. An antitrust investigation, however, is still ongoing.

“We work closely with the government officials to make sure we are doing the right things from a legislative perspective, and it’s challenging,” he told the South China Morning Post at the summit in Barcelona. “But we view this as an important market.”

China’s State Administration for Industry and Commerce launched a probe last summer into complaints against Microsoft involving compatibility, bundling and document-authentication issues with its popular software products. Soon after, authorities raided the company offices in Beijing, Guangzhou, Shanghai and Chengdu cities.

At the Mobile World Congress, Microsoft announced its latest Lumia devices will go on sale by April. A basic Lumia 640, with a 12.7cm screen and 8 megapixel camera will cost 139 euros (HK$1,206) for the basic 3G version.

The top-end 640 XL – with 4G broadband, an 14.5cm screen and a 13 megapixel camera – will retail at 219 euros.

Meanwhile, Microsoft has also scored another major coup in the smartphone battle. While only a small, but significant step, Samsung’s widely praised Galaxy S6 and S6 Edge will be pre-loaded with Microsoft software include Skype, and its cloud-storage service OneDrive.

Both devices are expected to be sold in the tens of millions of units.

The deal is seen as a sign Microsoft is stepping up attempts to reach users through different operating systems and across platforms.

Earlier at the Lumia’s unveiling, Elop said: “We should not obsess on the mobility of any single device. We should focus on the mobility of the experiences a person has across devices. That is where we have shifted our focus.”

He said the aim of using Windows across its devices will deliver a better experience.

The low price is being aimed at bringing in customers within Microsoft’s new Windows 10 operating platform across computers, tablets and phones.