MS Windows hacking Chinese computers or just Chinese pricing?

When in October Microsoft, via their Windows Genuine Advantage (WGA) engine, began blacking out pirated versions of their operating system across China, you would have thought they were poisoning babies with the upheaval it caused.

A lawyer in Beijing went so far as to call it a crime and to cry out “That’s not fair.”

But it is fair. You can’t legitimately expect a company not to do everything in its power to prevent the illegal sale and use of its product.In the case of the lawyer above, his argument was that by showing the power of its hand in fighting pirated copies, Microsoft illustrated their ability to “hack” any computer using their product. And, of course, this is partially true. Through its Windows Update feature, Microsoft is granted the trust of installing software on your system automatically. If the company was malicious, this could be abused.

However, and I can’t make that bold enough, this is an optional feature for (legitimate) users’ benefit. Unlike malware being installed unknown and truly “hacking” the computer, WGA is a method by which to improve your Windows experience and further protect your system. If it’s not desired, you just click “disable” (and try to ignore the “are you really sure? [sniff]” nag screens).

But that’s not really what this is all about, is it? No, what this is really about is the fact that approximately 80-percent of computers in China are using pirated software, most of which were bundled in with the purchase of a new computer. It’s not even that users don’t know their software is pirated, they don’t know the difference.

Recent actions seem to illustrate that Microsoft is finally figuring this out. Though the whole Black Screen debacle gave the company a corresponding black eye from their China-based “customers”, it also woke the population to the fact that they’re using illegal software, and that has (mildly annoying) consequences.

And so, just over a month later, Microsoft has slashed prices on much of their Chinese product line. Clever.From

Microsoft says for a full year until December 31, 2009, the company will reduce the suggested retail price of its Simplified Chinese Home Edition Windows XP software from CNY960 to CNY399, a decrease of 58.4%. At the same time, the price of its three-installation packages of Office Home and Student Editions are decreased from CNY699 to CNY398, while its National Day holiday promotion of Office 2007 Home and Student Editions for CNY199 will last until the Spring Festival. The price of Windows Vista home edition maintains its price at CNY499.

In addition, Microsoft will provide free phone support service to users of authentic software until March 31, 2009.

Granted, with Windows 7 close on the horizon, XP is old stock and so a major discount makes sense. However, that the deep price slice is specifically geared towards Chinese customers I believe is no coincidence.

Pundits have been pronouncing that IP theft in China can only be combated effectively by offering the lower-income consumer base a cost-adjusted alternative. Until then pirating, and turning a blind-eye to the ethics of it, will remain the norm here.

Microsoft has taken the first step in recognizing this and developing a marketing strategy around it. Without such, they will continue to see their software (legitimate or not) being replaced with more cost-effective (or free) alternatives such as the home-grown Red Flag Linux, which recently replaced Windows at many Internet cafes in Nanchang.

This MS-Linux switch is also going on in the electronic cities across the country. Wise to the fact that there is increasing public demand for legitimate software, “ma and ba” PC dealers are now bundling their systems with Linux instead of the previously pirated versions of XP.

Who will win in the end is tough to say. Linux is well and good, and getting a bunch of budget-savvy Chinese users behind it could be its tipping point from an obscure third-place OS to a real contender, but you can be guaranteed that Microsoft isn’t going to let the Chinese market go without a fight.

Me? I bought a MacBook today. No joke.

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