China awash with pirate XP software

By CNN's Kristie Lu Stout

HONG KONG, China (CNN) -- Pirated versions of the Windows XP operating system are widely available in China ahead of its official launch on Thursday.

Counterfeit copies were available for sale in Beijing's Zhongguancun area for $3.60 a piece, the Beijing Evening News reported.

Industry watchers have estimated that more than 90 percent of the software installed in China is unauthorized, a problem expected to worsen as the country's PC user base grows.

XP beta copy suspected

Microsoft told CNN that the pirated versions of XP might be based on a stolen beta copy of an English-language version.

"We suspect that these are preview kits, copies of XP beta copies for customers to evaluate the product," said Microsoft's Asia marketing manager Balaprakash Kasiviswanathan.

"Customers will not have the full and final version by buying those (pirated) CDs."

Microsoft's simplified Chinese version of Windows XP will retail in the Mainland market at $180 for a home license, and $240 for a professional license.

Shops in Hong Kong have also been selling pirate versions of the operating system months ahead of its November 2 launch of the traditional Chinese version in the territory.

The pirated discs were retailing in Hong Kong for around $13, a fraction of the authorized copy price tag.

Asia's software piracy rate rose to 51 percent in 2000 from 47 percent the previous year, according to a study by the Business Software Alliance (BSA), an anti-piracy group representing the world's leading software makers.

Worldwide, China ranked second for software piracy in 2000 after Vietnam.

The report valued the losses last year in China due to software piracy at over $1 billion, almost double the losses posted in 1999.

Piracy on the rise

Software piracy has been on the rise in China despite efforts by the government and business groups to crush the practice.

"When you get to places away from Beijing, the problem gets worse," said IDC's Beijing-based tech analyst Matthew McGarvey.

"It's easy to replicate. It's easy to distribute. And, frankly, there's demand."

Despite China's history of poor intellectual property protection, Microsoft remains a champion and defender of the Mainland market.

Microsoft last month announced a wave of initiatives to help further develop China's nascent software industry.

The software giant plans to expand its technical support center and establish a joint venture technical support company in Shanghai.

Microsoft also launched a two-year program to train 2,000 software professionals throughout China.

At the APEC CEO Summit in Shanghai, Microsoft Chairman Bill Gates praised the Shanghai municipal government for its piracy crackdown.

The government was also commended for its promise to buy authorized copies of Microsoft software.