Microsoft: A Stone Pecked by Two Birds

Posted on September 23, 2008
Filed Under China Business, Software Piracy |

The South China Morning Post reports:

Microsoft said it had slashed the price for Office last year Home and Student Edition to 199 yuan (HK$227) from 699 yuan. The promotion, which started on Monday, will last through next week’s National Week holiday.

The price cut is designed to make Microsoft’s products in the mainland more affordable and more promotions are likely in future, said Jim Lin, the company’s public relations manager in Beijing.

“With this price, we believe more customers can enjoy authorised software products,” he said.

RMB200 is still a lot more than RMB7, or having your corner computer store throw it for free. While this may be seen as an acknowledgment of the reality of pricing in the face of software piracy in China, there may be another another reason.

Rumors are not dead yet that Microsoft will be taken to court under China’s anti-monopoly law. A hefty price cut with the promise of endless sales promotions may help against accusations that Microsoft’s dominant market position allows it to price with impunity.

Then again, people may begin to wonder why they didn’t allow Chinese consumers to enjoy authorized software products years ago with a realistic market price. The key question, that I can’t answer yet, is whether this is driven by market competition or fear of market regulation.

Meantime, happy shopping!

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